Question

Carter bought a new car and financed $25,000 to make the purchase. He financed the car for 48 months with an APR of 4.5%. Assuming he made monthly payments, determine the total interest Carter paid over the life of the loan. Round your answer to the nearest cent, if necessary.

Answer 1

Carter paid a total interest of $2250 (9% of the cost of the car) for the car.

Explanation:

cost = $25000

Time = 48 months

APR = 4.5%

Interest = (25000 x 4.5 x 2) /100

= $2250

Percentage of interest paid = (2250/25000) x 100

= 9%

Carter paid a total interest of $2250 (9% of the cost of the car) for the car.