Camille purchased a motorcycle for $5,723. She made a down payment of $1,775. She applied for a four-year installment loan with an interest rate of 10.2%. What is the total cost of the motorcycle after four years?
$6599.48
$6993.60
$4824.48
$8768.60
My answer is c
I agree with you and went back to add in the down payment and got $6599.48
I disagree, show me your steps to get c)
I am trying to figure out what formula to use
To calculate the total cost of the motorcycle after four years, we need to consider the initial purchase price, the down payment, and the interest on the loan.
First, subtract the down payment from the purchase price:
$5,723 - $1,775 = $3,948
Next, calculate the interest on the loan over four years. To do this, we'll use the formula: Interest = Principal × Rate × Time.
Principal = $3,948 (purchase price after down payment)
Rate = 10.2% (written as a decimal: 0.102)
Time = 4 years
Interest = $3,948 × 0.102 × 4 = $1,611.84
Now, add the interest to the purchase price after the down payment to get the total cost:
$3,948 + $1,611.84 = $5,559.84
Therefore, the total cost of the motorcycle after four years is $5,559.84, which is closest to option C, $4,824.48.