Question

this is grade 11 math, please explain how you got your answer

thanks

12) Boris has purchased a car for $25,000. He will pay for the car with monthly payments for 5 years. Interest will be charged at 5%/a compounded monthly. a) Determine the amount of his monthly payment. (2 decimal places) b) Determine the amount of interest he will pay. (2 decimal places) You will need some of these formulas: P= A(1 + i) -" A = P(1 + i)" R[(1 + i)" - 1] R[1 - (1 + i)-") PV = FV Page 2 / 2

Answer 1

12) Given:

Principal = $25000

TIme = 5 years

Compounded monthly

i=interest = 5%/12 = 0.004166

n=5*12 = 60

$A=P(1+i)^{n}$

A=final amount

substitute P,i,n

A = 25000(1 +0.004167) = 25000 . 1.28335 = $32083.97

A=final amount = 32083.97 which will be the Future value

a) monthly payments:

$FV=\frac{R[(1+i)^n-1]}{i}$

R= monthly payments

i=interest = 5%/12 = 0.004166

n=5*12 = 60

FV=32083.97

$32083.97=\frac{R[(1+0.004166)^{60}-1]}{0.004166}\\ R[(1+0.004166)^{60}-1]=133.6618\\ R(1.28330 -1)=133.6618\\ R*0.2833=133.6618\\ R=\$ 471.80$

monthly payments = $471.80

b) Interest = final amount - Principal = 32083.97-25000

Interest = $7083.97