Question

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

Answer 1

Mark's total payment is $7,257

Explanation:

Answer 2

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.