Answer:
THATS EZ WILL YOU PAY ME IF I TELL YOU THE ANSWER
Step-by-step explanation:
Answer:
Step-by-step explanation:
B
The correct option for the total lifetime cost for Toby to pay off his four loans is $31,616.
Computation of present value of the loans:
The given information is:
Principal = $ 6125
Interest rate = 5.3%
![\text{The effective monthly interest rate} (i) =\frac{0.053}{12} \\ \text{The effective monthly interest rate} (i) = 0.0044](https://tex.z-dn.net/?f=%5Ctext%7BThe%20effective%20monthly%20interest%20rate%7D%20%28i%29%20%3D%5Cfrac%7B0.053%7D%7B12%7D%20%5C%5C%20%5Ctext%7BThe%20effective%20monthly%20interest%20rate%7D%20%28i%29%20%3D%200.0044)
![\text{The effective annual interest rate} (i) = (1 + 0.0044)^{12} -1\\ \text{The effective annual interest rate} (i) = 0.0543](https://tex.z-dn.net/?f=%5Ctext%7BThe%20effective%20annual%20interest%20rate%7D%20%28i%29%20%3D%20%281%20%2B%200.0044%29%5E%7B12%7D%20-1%5C%5C%20%5Ctext%7BThe%20effective%20annual%20interest%20rate%7D%20%28i%29%20%3D%200.0543)
The present worth of all the loans is:
![P = 6125 + 6125 \times (1 + 0.0543)^{1} + 6125\times (1 + 0.0543)^{2} + 6125 \times(1 + 0.0543)^{3} \\P = $22,671.40](https://tex.z-dn.net/?f=P%20%3D%206125%20%2B%206125%20%5Ctimes%20%281%20%2B%200.0543%29%5E%7B1%7D%20%2B%206125%5Ctimes%20%281%20%2B%200.0543%29%5E%7B2%7D%20%20%2B%206125%20%5Ctimes%281%20%2B%200.0543%29%5E%7B3%7D%20%5C%5CP%20%3D%20%2422%2C671.40)
If he starts paying after four years, the worth of the loans by then is:
![\text{Total lifetime cost} = P \times \text{Effective Annual Interest Rate}\\\text{Total lifetime cost}= 22671.40\times (1 + 0.0543)^{4} = 31,616.16](https://tex.z-dn.net/?f=%5Ctext%7BTotal%20lifetime%20cost%7D%20%3D%20P%20%5Ctimes%20%5Ctext%7BEffective%20Annual%20Interest%20Rate%7D%5C%5C%5Ctext%7BTotal%20lifetime%20cost%7D%3D%2022671.40%5Ctimes%20%281%20%2B%200.0543%29%5E%7B4%7D%20%20%3D%2031%2C616.16)
Therefore, the correct option is b.
To know more about the effective interest rates and loans worth, refer to the link below:
brainly.com/question/1757741