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Your $54,200 6 year car loan is at 15.1% compounded.annually. What will you have paid for your car after 6 years?

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Final answer:

After 6 years, the total amount paid for a $54,200 car loan at 15.1% interest compounded annually will be $109,113.84.

Step-by-step explanation:

Calculating Total Payment on a Compounded Car Loan

To calculate the total amount paid for a car after 6 years on a $54,200 loan at 15.1% interest compounded annually, we use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:

  • A is the amount of money accumulated after n years, including interest.
  • P is the principal amount (the initial amount of money).
  • r is the annual interest rate (decimal).
  • n is the number of times that interest is compounded per year.
  • t is the time the money is invested for, in years.

For this particular loan:

  • P = $54,200
  • r = 15.1% or 0.151
  • n = 1 (since it is compounded annually)
  • t = 6 years

To find the total amount paid after 6 years, we'll plug these values into the formula:

A = $54,200(1 + 0.151/1)^(1*6)

A = $54,200(1 + 0.151)^6

A = $54,200(1.151)^6

A = $54,200 * 2.0132

A = $109,113.84

Therefore, after 6 years, the total amount paid for the car will be $109,113.84.

User Jasdeep Singh
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