Question

To purchase $12,900 worth of machinery for her business, Melissa made a down payment of $2100 and took out a business loan for the rest. After years of paying monthly payments of $478.67, she finally paid off the loan.
a) What was the total amount Melissa ended up paying for the machinery (including the down payment and monthly payments)?

(b) How much interest did Melissa pay on the loan?

Answer 1

Answer:

a) $13588.08

b) $688.08

Step-by-step explanation:

Melissa had to purchase $12,900 worth of machinery for her business.

She made a down payment of $2100 and after that made monthly payments of $478.67 for the business loan for the rest.

Given that after years of paying monthly payments of $478.67, she finally paid off the loan.

Assume that she took 2 years to repay the loan.

a) Therefore, the total amount Melissa ended up paying for the machinery was $[2100 + (478.67 × 24)] = $13588.08 (Answer)

b) Therefore, the amount of interest that Melissa pay on the loan is $(13588.08 - 12900) =$688.08. (Answer)