Question

Kacie has a balance of $10,000 on a loan with an annual interest rate of 8%. To pay off the $10,000 in four years, Kacie will have to make a minimum payment of $244.13 per month. How much will Kacie pay in interest over the four year period?

Answer 1

244.13 * 48 months = 11,718.24

Therefore, the total interest is 1,718.24

Explanation:

Answer 2

Given that loan balance is 10000 dollars

Interest rate = 8%.

Monthly payment=EMI .= 244.13 dollars

No of months paid = 48

Hence total amount repaid = 48x244..13 =1171824

Out of this amount repaid principal = 10000 dollars

Hence interest amount = 11718.24.-10000 = 1718.24. dollars

Formula used:. Total amount repaid = Principal +. interest

Total amount repaid = EMI. x monthly instalment.