Lee purchased an automobile for $17,000 with a 16.0% APR for 78 months. Lee pays off the loan in 30 months. How much interest will Lee receive?
Lee won't "receive" any interest. But, if you want to know how much interest he'll save, then figure the interest he'd pay for 6 1/2 years (78 months). Then figure the interest he'll pay for 2 1/2 years (30 months). Subtract the difference.
Hi. My name is Niels, and i come from Denmark. i go to business school, and i am doing a project right now about North Korea.
it is includes the two subjects: society, and international economy.
the exact thing i am writing about is: North Koreas economy, the people in North Korea and North Korea's future.
i am going to an examination soon, where i have to tell some of the most important things in my project, but i also have to include some new things. i hope you can help me, with which new things would be good to include.
the best regards, Niels
To calculate the interest that Lee will receive, we first need to determine the total amount of interest paid over the 30-month period.
Step 1: Calculate the total amount borrowed or the principal:
The total amount borrowed by Lee is $17,000.
Step 2: Calculate the monthly interest rate:
The annual percentage rate (APR) is given as 16.0%. To calculate the monthly interest rate, divide the APR by 12.
Monthly interest rate = 16.0% / 12 = 1.33%.
Step 3: Calculate the monthly payment:
To determine the monthly payment, we can use the formula for calculating the monthly payment on a loan:
P = (r * PV) / (1 - (1 + r)^(-n)), where:
P = monthly payment
r = monthly interest rate (in decimal form)
PV = present value of the loan (total amount borrowed)
n = number of months
In this case, we have:
P = (1.33% * $17,000) / (1 - (1 + 1.33%)^(-78))
P ≈ $306.96 (rounded to the nearest cent)
Step 4: Calculate the total interest paid:
To find the total interest paid, we multiply the monthly payment by the number of months (30) and subtract the principal amount:
Total interest paid = (monthly payment * number of months) - principal amount
Total interest paid = ($306.96 * 30) - $17,000
Total interest paid ≈ $2,108.80
Therefore, Lee will pay approximately $2,108.80 in interest over the 30 months.