Question

Kawai requires a loan of $33,000 to buy a used sport utility vehicle. His banks offers financing at 6.75% compounded monthly, for a term of 6 years, payable monthly. What is the total cost of this loan?

Answer 1

Answer:

$49,126.87

Step-by-step explanation:

Given data

Principal= $33,000

rate= 6.75%

Time= 6 years

First, convert R as a percent to r as a decimal

r = R/100

r = 6.65/100

r = 0.0665 rate per year,

Then solve the equation for A

A = P(1 + r/n)^nt

A = 33,000.00(1 + 0.0665/12)^(12)(6)

A = 33,000.00(1 + 0.005541667)^(72)

A = $49,126.87

Hence the final amount is  $49,126.87