determine the total cost of repaying a $750 credit card loan with a 17.99% interest rate compounded monthly and a fixed monthly payment over a period of 9 months. Round the answer to the nearest dollar.
What is the total cost of repaying the loan to the nearest dollar?
To determine the total cost of repaying the loan, we need to calculate the monthly payment amount and then multiply it by the number of months.
First, we need to calculate the monthly interest rate. Since the interest rate is given as an annual rate, we divide it by 12 to get the monthly rate:
Monthly interest rate = (17.99%/12) = 1.4992%
Next, we need to calculate the monthly payment amount using the loan amount, interest rate, and loan term. We can use the formula for calculating the fixed monthly payment on a loan:
Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^(-Number of Months))
Substituting the given values:
Monthly Payment = (750 * 1.4992%) / (1 - (1 + 1.4992%)^(-9))
Monthly Payment = 11.24 (rounded to the nearest cent)
Finally, we calculate the total cost of repaying the loan by multiplying the monthly payment by the number of months:
Total cost = Monthly Payment * Number of Months
Total cost = 11.24 * 9 = 101.16
Rounding the answer to the nearest dollar, the total cost of repaying the loan is $101.
Determine the total cost, fixed monthly payment, and the total interest paid when repaying and auto loan of $15,000 with a 5% interest rate compounded monthly and a 60-month loan term. Round the answers to the nearest dollar.
To the nearest dollar, the total cost of repaying the loan is $____; the fixed monthly payment amount if $____; the total amount of interest paid is $____.
To determine the total cost of repaying the loan, the fixed monthly payment amount, and the total amount of interest paid, we can use the loan amount, interest rate, and loan term.
The loan amount is $15,000, the interest rate is 5% (or 0.05), and the loan term is 60 months.
First, we need to calculate the monthly interest rate by dividing the annual interest rate by 12:
Monthly interest rate = 5% / 12 = 0.4167%
Next, we can use the formula for calculating the fixed monthly payment on a loan:
Fixed Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^(-Number of Months))
Substituting the given values:
Fixed Monthly Payment = (15000 * 0.4167%) / (1 - (1 + 0.4167%)^(-60))
Fixed Monthly Payment = $283 (rounded to the nearest dollar)
To calculate the total cost, we multiply the monthly payment by the number of months:
Total cost = Fixed Monthly Payment * Number of Months
Total cost = $283 * 60 = $16,980
To calculate the total amount of interest paid, we subtract the loan amount from the total cost:
Total amount of interest paid = Total cost - Loan amount
Total amount of interest paid = $16,980 - $15,000 = $1,980
Rounding the answers to the nearest dollar:
The total cost of repaying the loan is $16,980.
The fixed monthly payment amount is $283.
The total amount of interest paid is $1,980.