Question

8. A car costs $10,500, and you're offered a loan that requires $800 down and a monthly payment of $187.53 for 60 months, how much will you pay in interest? Round your answer to the nearest dollar.$

Answer 1

The Solution:

Given that a car that cost $10500 was offered as a loan with a down payment of $800.

This means the loan balance will now be:

`\text{Loan baleance=10500-800= \$9700}`

The loan payment plan is a monthly payment of $187.53 for 60 months.

`\text{Total Payment=187.53}*60=\text{ \$11251.80}`

We are required to find how much was paid in interest.

We shall take the difference between the total payment and the loan balance.

`\begin{gathered} \text{Interest paid=Total payment-Loan balance} \\ \text{Interest paid=11251.80-9700= \$1551.80}\approx\text{ \$1552} \end{gathered}`

Therefore, the correct answer is $1552