Question

Angel buys a $30,100 sports car and has a monthly payment of $584.92 over 5 years with an annual APR of 6.2%. Part A: [Must show equation] Determine the total amount paid to the bank over the course of the loans. Part B: Then determine the total finance charge paid to the bank

Answer 1

A. $35,095.2

B. $4,995.2

Step-by-step explanation:

The total amount paid to the bank can be calculated as the monthly payment multiplied by the number of months in the course of the loan. So, it is equal to:

Total = $584.92 x 5 years x 12 months

Total = $35,095.2

On the other hand, the total finance charge paid to the bank can be calculated as the total amount paid to the bank less the initial cost of the car, so:

$35,095.2 - $30,100 = $4,995.2

Therefore, the answers are:

A. $35,095.2

B. $4,995.2