Question

Part A : How long will it take you to pay a $600000 loan at 3.7% yearly interest if you continue to make monthly payments of $2500 per month?

Part B : How much money will you have paid in total after you are done paying the above loan with its respective interest rate? AND, based on your answers, how much money did the bank make in profit?

DO ALGEBRAICALLY!!! PLEASE AND THANK YOU!!!

Answer 1

Part A: 2.159 years.

Part B: $647929.8.

$47929.8

Explanation:

Part A:

Let, it will take x years to pay.

According to the question,

`2500*12x = $600000 + $600000 * (3.7x)/(100) \\12x = 240(1 + (3.7x)/(100))\\x = 2(1 + (3.7x)/(100))\\0.926x = 2\\x = 2.159`

Part B:

Total money that needs to be paid is
`600000(1 + (3.7* 2.159)/(100) )` = $647929.8.

The bank made $47929.8 in profit.