Question

If Bonnie financed $10,000 for a new car at a 4% APR, paid back over 5 years, her monthly principal + interest payment would be $184. Assuming she keeps her car and pays it off in 5 years, how much total money will she have paid the lender in 5 years?

a. $10,000
b. $11,040
c. $11,040
d. $12,000

Answer 1

Bonnie will have paid a total of $11,040 to the lender after 5 years, calculated by multiplying the monthly payment of $184 by 60 months.

Step-by-step explanation:

If Bonnie financed $10,000 for a new car at a 4% APR, and her monthly principal plus interest payment was $184, we need to calculate the total amount she will have paid after 5 years to determine how much money she will have paid the lender in total.

To calculate this, we multiply the monthly payment by the number of months she will make these payments:

• Number of months in 5 years = 5 years × 12 months/year = 60 months.
• Total amount paid = Monthly payment × Number of months
• Total amount paid = $184 × 60 = $11,040.

Hence, Bonnie will have paid a total of $11,040 to the lender after 5 years.