Question

To purchase $13,700 worth of machinery for her business, Melissa made a down payment of $1800 and took out a business loan for the rest. After 2 years of paying monthly payments of $527.43, she finally paid off the loan.a) What was the total amount Melissa ended up paying for the machinery (including the down payment and monthly payments)?(b)How much interest did Melissa pay on the loan?

Answer 1

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a)

Payment = $13700

down payment = $1800

monthly payments = $527.43

Total payment = 1800 + 24(527.43)

Total payment = 1800 + 12658.32

Total payment = $14458.32

b) 13700 --------------------- 100

14458.32 --------------- x

x = (14458.32 x 100) / 13700

x = 105.54

Interest = 105.54 - 100

= 5.5 %