Question

frank purchased a boat for $7,525. he made a down payment of $475. he applied for a six year installment loan with an interest rate of 8.4% in the amount of $7,050. what is the total cost of the boat after six years?

Answer 1

$9474.40

Explanation:

A spreadsheet can be used to calculate the amortization of the loan. The one attached uses rounding to the penny for all dollar amounts. The result is that the payment amount is rounded down, and the final payment is about 12¢ short. The total repaid on the loan will be slightly more than the product of payment amount ($124.99) and number of payments (72).

The total cost of the boat is the sum of down payment, loan amount, and interest amount. That sum is $9474.40.