To pay for a $15,400 fishing boat, Alan made a down payment of $3600
and took out a loan for the rest. On the loan, he paid monthly payments of
$261.20 for 4 years.
(a) What was the total amount Alan ended up paying for the fishing boat (including the down payment and monthly payments)?
$
(b) How much interest did Alan pay on the loan?
(a) The total amount Alan ended up paying for the fishing boat is calculated as follows:
Down payment: $3600
Loan amount: $15400 - $3600 = $11800
Monthly payments: $261.20 x 12 months/year x 4 years = $12571.20
Total amount paid: $3600 + $11800 + $12571.20 = $27971.20
So the total amount Alan ended up paying for the fishing boat (including the down payment and monthly payments) was $27,971.20.
(b) To calculate the amount of interest Alan paid on the loan, we need to subtract the principal (the amount borrowed) from the total amount paid, and then subtract any fees or charges associated with the loan.
Total amount paid: $12571.20
Principal: $11800
Interest paid: $12571.20 - $11800 = $771.20
So Alan paid $771.20 in interest on the loan.
To solve this problem, we need to calculate the total amount Alan paid for the fishing boat, including the down payment and monthly payments. We also need to calculate the amount of interest Alan paid on the loan.
(a) The total amount Alan paid for the fishing boat is the sum of the down payment and the total amount paid in monthly payments over 4 years.
Down payment = $3600
Monthly payment = $261.20
Number of monthly payments = 4 * 12 = 48
Total amount paid in monthly payments = Monthly payment * Number of monthly payments = $261.20 * 48 = $12,537.60
Total amount Alan paid for the fishing boat (including down payment and monthly payments) = Down payment + Total amount paid in monthly payments = $3600 + $12,537.60 = $15,137.60
Therefore, the total amount Alan ended up paying for the fishing boat (including the down payment and monthly payments) is $15,137.60.
(b) To calculate the amount of interest Alan paid on the loan, we need to subtract the original loan amount from the total amount paid in monthly payments.
Total amount paid in monthly payments = $12,537.60
Loan amount = Total amount paid in monthly payments - Down payment = $12,537.60 - $3600 = $8937.60
The amount of interest paid on the loan is the total amount paid in monthly payments minus the loan amount.
Interest paid on the loan = Total amount paid in monthly payments - Loan amount = $12,537.60 - $8937.60 = $3600
Therefore, Alan paid a total of $3600 in interest on the loan.