Question

Mia recently bought a car worth $20,000 on loan with an interest rate of 6.6%. She made a down payment of $1,000 and has to repay the loan within two years (24 months). Calculate her total cost. Finding the total cost takes two steps.

Step 1: Calculate the interest on the loan.
Interest = Principal × Rate × Time
Interest = $19,000 × 0.066 × (24/12) = $2,508
Step 2: Add the interest to the principal and the down payment.
Total Cost = Principal + Interest + Down Payment
Total Cost = $20,000 + $2,508 + $1,000 = $23,508

Answer 1

To calculate the total cost, first calculate the interest on the loan using the formula Interest = Principal × Rate × Time. Then, add the interest to the principal and the down payment to get the total cost.

Step-by-step explanation:

To calculate the total cost, we need to follow two steps:

1. Calculate the interest on the loan: Interest = Principal × Rate × Time = $19,000 × 0.066 × (24/12) = $2,508
2. Add the interest to the principal and the down payment to get the total cost: Total Cost = Principal + Interest + Down Payment = $20,000 + $2,508 + $1,000 = $23,508

Therefore, Mia's total cost for the car will be $23,508.