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elena55 [62]
3 years ago
6

Jesse is thinking about buying an entertainment system that will cost $1,800. The store will finance the purchase for 12 months

at 20 percent interest. His payments will be $166.74. How much will he pay in interest over the life of the loan?
Business
1 answer:
Len [333]3 years ago
5 0

Answer:

Explanation:

First, find the future value of the annuity payments. You can solve this using a Financial calculator. I'm using TI BA II Plus calc.

N= 12

I/Y = 20% /12 = 1.667% ,monthly rate in this case

PMT=166.74

PV =0

then CPT FV = 2,194.876

To calculate the interest paid over the life of the loan, subtract the amount borrowed from this FV amount;

=2,194.876 - 1,800

Interest = $394.876

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3 years ago
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I hope my answer helps you

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4 0
4 years ago
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so it is true

Explanation:

4 0
4 years ago
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