Question

If Samatha finances the entire cost of a $700 bike at an APR of 2.95%, how much will she end up paying in total for the bike after paying off her loan in 2 years

Answer 1

Based on the interest rate, the cost of the bike, and the period of payment, Samatha will pay $721.71.

What will Samatha pay?

Samatha will pay a certain amount monthly. That amount can be found as:

Loan amount = Amount x ( 1 - ( 1 + rate) ^-number of periods) / rate

Solving gives:

700 = Amount x ( 1 - (1 + 2.95%/12) ⁻²⁴ / 2.95%/12 months)

Amount = 700 /  ( 1 - (1 + 2.95%/12) ⁻²⁴ / 2.95%12 months)

= $30.07

Total amount paid by Samatha:

= 30.07 x 24 months

= $721.71

Find out more on loan payments at brainly.com/question/26011426.