Question

A company purchased a new precision metal lathe for $73,900, making a down payment of 20% and financing the balance with 36 monthly payments of $1,893.79. What is the total cost of the lathe?

a) $73,900
b) $87,375.44
c) $94,013.44
d) $100,651.44

Answer 1

The total cost of the lathe is $94,013.44.

Step-by-step explanation:

To find the total cost of the lathe, we need to add the down payment to the total amount financed. The down payment is 20% of $73,900, which is $14,780.

The financed amount is the remaining balance after the down payment, which is $73,900 - $14,780 = $59,120.

Now, we need to calculate the total cost of the lathe by adding the monthly payments over the course of 36 months. The total cost is $59,120 + (36 x $1,893.79) = $94,013.44.