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cestrela7 [59]
4 years ago
13

evan purchased a boat for $8825. He made a down payment of $2500. He applied for a three-year installment loan with an interest

rate of 10.2%. What is the total cost of the boat after three years
Mathematics
1 answer:
Gekata [30.6K]4 years ago
5 0
The present worth of the boat is $8825. The interest rate is 10.2% and it's not stated whether or not the interest is nominal, so we assume it's annual and effective. We use the formula:
F = P (1 + i)^n
where F is the future worth
P is the present worth
i is the effective annual interest rate
n is the number of years

Substituting:
F = 8825(1 + 0.102)^3
F = 11810.26

The future worth of the boat is 
$11,810.26
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