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To purchase 13,700 worth of machinery for her business, Amy made a down payment of 1900 and took out a business loan for the rest. After 3 years of paying monthly payments of 358.99, she finally paid off the loan.

(a) What was the total amount Amy ended up paying for the machinery (including the down payment and monthly payments)?

(b) How much interest did Amy pay on the loan?

1 Answer

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Answer: (A) The total amount Amy ended up paying for the machinery was $14,823.64.

(B) Amy paid $1,900 in interest on the loan.

Step-by-step explanation:(a) To calculate the total amount Amy ended up paying for the machinery, we need to consider the down payment and the total amount paid through monthly payments.

Down payment: $1900

Total amount paid through monthly payments:

Number of monthly payments: 3 years * 12 months/year = 36 months

Monthly payment amount: $358.99

Total amount paid through monthly payments: 36 months * $358.99/month = $12,923.64

Total amount paid for the machinery (including down payment and monthly payments):

Total amount paid = Down payment + Total amount paid through monthly payments

Total amount paid = $1900 + $12,923.64 = $14,823.64

Therefore, the total amount Amy ended up paying for the machinery was $14,823.64.

(b) To calculate the interest paid on the loan, we need to subtract the loan amount from the total amount paid.

Loan amount = Total amount paid - Down payment

Loan amount = $14,823.64 - $1900 = $12,923.64

Interest paid on the loan:

Interest paid = Total amount paid - Loan amount

Interest paid = $14,823.64 - $12,923.64 = $1,900

Therefore, Amy paid $1,900 in interest on the loan.

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