Question
In: Finance
A sailboat costs $22,717. You pay 5% down and amortize the restwith equal monthly payments...
A sailboat costs $22,717. You pay 5% down and amortize the rest with equal monthly payments over a12-year period. If you must pay 7.8% compounded monthly,what is your monthly payment?How much interest will you pay?
Solutions
Expert Solution
Loan amount = price of Boat*(1- % of doenpayment)
Loan amount = $22717*(1-0.05)
Loan amount = $21,581.15
Calculating the Monthly Payments:-
Where, P = Loan amount = $21,581.15
r = Periodic Interest rate = 7.8%/12 = 0.65%
n= no of periods = 12 years*12 = 144
Monthly payment = $231.25
b). Total Interest you pay = (No of payments*Monthly payment) - Loan Amount
Total Interest you pay = (144*$231.25) - $21,581.15
Total Interest you pay = $11,718.85
jeff jeffy answered 2 years agoRelated Solutions
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