Question

A sailboat costs $30,316. You pay 5% down and amortize the rest with equal monthly payments over a 15-year period. If you must pay 7.8% compounded monthly, what is your monthly payment? How much interest will you pay?

Monthly payments: $____

Interest: $____

(Please square, label, or circle the answer)

Answer 1

solution given; we have paid 5% down payment, present value of annuity over the 10 year kriod would be 0.95 x 30,316 = $28.800 NOW, Let us assume monthly Payment be Mothen we have 28.800: M t 115X12 THO.078 '-(170.046 140.078 H 0.078 12 Li_) 180 Lila ito.0065 ) H0.0065 28.800 = HO.0065 28.800 = MX !- Gutococc) 180 0.078 · 12

98.800 = M X 1-0. 311544qui -0.0065 28.800 = mx 105.9163 me 271.91 Therefore monthly payments must be = $ 271.91 There monthly Payments are made 15X12 times = 180 times Total payments made would be = 180 x 272 = 648.960 These fare interest Paid = $ 48,960 (1) 28.800 Interest Paid = $20,160
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