Question

Henry buys a large boat for the summer, however he cannot pay the full amount of $32,000 at

once. He puts a down payment of $14,000 for the boat and receives a loan for the rest of the
payment of the boat. The loan has an interest rate of 5.5% and is to be paid out over 4 years.
What is Henry’s monthly payment, and how much does he end up paying for the boat overall?

Answer 1

Monthly Payment = $457.5

Total amount Henry end up paying for the boat overall = $35,960

Explanation:

Total Amount to be paid = $32,000

Down Payment = $ 14,000

Interest rate = 5.5%

Total time for Amount to be paid = 4 years

Rest of the payment to be paid = 32,000 - 14,000

= 18000

Amount of interest = P*r*t

P= Principal Amount

r = rate

t = time

Putting values

Amount of interest= 0.055 *18000*4 = 3960

Total Remaining payment = 18000+3960 = 21,960

As Payment to be paid in 4 years, So number of months = 4*12 = 48 months

Monthly payment = Total Payment / Months = 21,960/48 = 457.5

So, Monthly Payment = $457.5

Total amount Henry end up paying for the boat overall = Down Payment + Remaining Payment

=14,000+21960

= 35960

So, Total amount Henry end up paying for the boat overall = $35,960