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12 May, 04:35

Henry buys a large boat for the summer, however he cannot pay the full amount of $32,000 at

once. He puts a down payment of $14,000 for the boat and receives a loan for the rest of the

payment of the boat. The loan has an interest rate of 5.5% and is to be paid out over 4 years.

What is Henry's monthly payment, and how much does he end up paying for the boat overall?

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Answers (1)
  1. 12 May, 06:30
    0
    Monthly Payment = $457.5

    Total amount Henry end up paying for the boat overall = $35,960

    Step-by-step explanation:

    Total Amount to be paid = $32,000

    Down Payment = $ 14,000

    Interest rate = 5.5%

    Total time for Amount to be paid = 4 years

    Rest of the payment to be paid = 32,000 - 14,000

    = 18000

    Amount of interest = P*r*t

    P = Principal Amount

    r = rate

    t = time

    Putting values

    Amount of interest = 0.055 * 18000*4 = 3960

    Total Remaining payment = 18000+3960 = 21,960

    As Payment to be paid in 4 years, So number of months = 4*12 = 48 months

    Monthly payment = Total Payment / Months = 21,960/48 = 457.5

    So, Monthly Payment = $457.5

    Total amount Henry end up paying for the boat overall = Down Payment + Remaining Payment

    =14,000+21960

    = 35960

    So, Total amount Henry end up paying for the boat overall = $35,960
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