A sailboat costs $21818. you pay 25% down and amortize the rest with equal monthly payment...

A sailboat costs $21818. you pay 25% down and amortize the rest with equal monthly payment over a 15 year period. if you must pay 8.1% compounded monthly what is your monthly payment?how much interest will you pay

Solutions

Expert Solution

25% of the total loan amount is down payment.

Loan amount = 21818 * 75% = 16,363.5

If the loan amount is P, rate on interest (monthly is r, and loan term is n the EMI will be

EMI = P*r[(1 +r)^n]/ [(1+ r)^n- 1]

Where,

Loan amount (P) = $16363.5

Time (n) = 180 Month

Interest rate [r] = 0.675% /Month

Let's put all the values in the formula to calculate EMI

EMI = 16363.5*0.00675[(1 +0.00675)^180]/ [(1+ 0.00675)^180- 1]

= 110.453625[(1.00675)^180]/ [(1.00675)^180- 1]

= 110.453625[3.3565636751]/ [3.3565636751- 1]

= 110.453625[3.3565636751]/ [2.3565636751]

= 110.453625[1.42434669199319]

= 157.32

Monthly Payment = $157.32

Total Payment Made = 157.32 * 180 = 28,317.6

Interest Amount = 28,317.6 - 16,363.5 = $11954.1

ekkarill92 answered 1 year ago

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