Mark borrowed $5,500 at 11.5 percent for five years. What is the amount of Mark's total payment?

Question

asked Dec 4, 2018 139k views

2 Answers

Aeonius · Answer 1 · 2018-12-08T18:43:13+0000

Answer:

The amount of Mark's Total payment is $7256.91.

Explanation:

Given : Mark borrowed $5,500 at 11.5 percent for five years.

To find : What is the amount of Mark's total payment?

Solution :

First we find the monthly payment,

Formula of monthly payment

$M=\frac{\text{Amount}}{\text{Discount factor}}$

Discount factor
D=(1-(1+i)^(-n))/(i)

Where, Amount = $5500

Rate r= 11.5%=0.115

i=(0.115)/(12)=0.00958

Time = 5 years

n=5*12=60

Now, put all the values we get,

D=(1-(1+i)^(-n))/(i)

D=(1-(1+0.00958)^(-60))/(0.00958)

D=(1-(1.00958)^(-60))/(0.00958)

D=(1-0.5643)/(0.00958)

D=(0.4357)/(0.00958)

D=45.4739

Monthly payment,
$M=\frac{\text{Amount}}{\text{Discount factor}}$

M=(5500)/(45.4739)

M=120.948

Monthly payment is $120.948

The amount is
120.948* 60=7256.91

Therefore, The amount of Mark's Total payment is $7256.91.