You took out a loan of $15,000. The debt carries an interest rate of 20.50% simple interest. suppose you can afford a 10% down payment, what is your down payment and new principal amount?

Question

You took out a loan of $15,000. The debt carries an interest rate of 20.50% simple rate. Suppose you can afford a 10% down payment. How much is your down payment and new principal amount? How much interes will you pay for 3 years? You want to pay off the debt with equal monthly payments in 3 years. How much is your monthly payment?

Answer 1

Downpayment is 15000/10=$1500.

New principal is 15000-1500=$13500.

3 years’ interest=13500×3×20.5/100=$8302.50

To pay off interest in equal monthly payments is 8302.50/36=$230.625.

To pay off the principal in 3 years is 15000/36=$416.667.

Add these together: $647.29 to the nearest cent.