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Debora [2.8K]
3 years ago
10

Frank purchased a boat for $7,525. He made a down payment of $475. He applied for a six-year installment loan with an interest r

ate of 8.4% in the amount of $7,050. What is the total cost of the boat after six years?
Mathematics
1 answer:
zhenek [66]3 years ago
8 0

Answer:

$10,603.20

Step-by-step explanation:

You can calculate the simple interest of the loan using the formula:

I = prt, where I = interest, p = principal amount, r = interest rate and t = time.  Plugging in the values from the problem:

p = $7,050

r = 8.4% or 0.084

t = 6 years

I = (7050)(0.84)(6) = $3,553.20

To find the total cost of the boat, add the interest and the purchase price:

$7,525 + $3,553.20 = $11,078.20

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