Question

You borrow a certain amount of money. Its annual interest rate is 6%, four-year (48 months) loan for a new delivery truck. Payments of $676.65 are required at the end of each month for 48 months. How much do you borrow

Answer 1

The amount borrowed is:

= $28,811.97.

Step-by-step explanation:

a) Data and Calculations:

Annual interest rate = 6%

Loan period = 4 years or 48 months

Monthly payments = $676.65

From an online financial calculator, the amount borrowed is:

N (# of periods) 48

I/Y (Interest per year) 6

PMT (Periodic Payment) 676.65

FV (Future Value) 0

Results

PV = $28,811.97

Sum of all periodic payments $32,479.20

Total Interest $3,667.23