Question

Alisha has a $15,000 car loan with a 6 percent interest rate that is compounded annually. How much will she have paid at the end of the five-year loan term? total amount = P (1 + i)t A. $19,500.25 B. $15,900.50 C. $20,073.50

Answer 1

I have another total loan payment formula (see attached):

Total = rate * principal * # of payments / (1-((1 + rate)^-n))

Total = .005 * 15,000 * 60 / (1- ((1.005)^-60)

Total = 4,500 / (1 -0.7413721962)

Total = 4,500 / 0.2586278038

Total = 17,399.52

I know that is NOT one of the answers but I am sure of the formula and the calculations. I hope this helps.

Answer 2

Answer: $20,073.50

Explanation:

Given : Principal amount :
`P=\$15,000`

Interest rate per year:
`i=6\%=0.06`

Time period :
`t=5`

The formula to calculate the compound amount after t years is given by :-

`A=P(1+i)^t`

Then , the amount she have paid at the end of the five-year loan term is given by :-

`A=15000(1+0.06)^5=20073.383664\approx20073.50`

Hence, the amount she have paid at the end of the five-year loan term = $20,073.50