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22 June, 10:09

Make a down payment of $1500 and finance the rest of $20000 at 1.9% interest rate, making equal monthly payments for 5 years.

Calculate the total interest you will pay over the term of the loan. Show the computations that lead to your answer.

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  1. 22 June, 11:01
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    We know that we have to m ake a down payment of $1500 and finance the rest of $20000 at a 1.9% interest rate, making equal monthly payments for 5 years. Our first step to solve this problem would be to convert 5 years into months.

    1 year = 12 months

    12 * 5 = 60 months

    Therefore, in 5 years there are 60 months.

    Now lets solve this problem step by step.

    Subtract the down payment from $20,000

    $20000-$1500=$18500

    Multiply the remaining number by the interest rate.

    $18500 * 1.9 = $35150

    Divide 35150 by number of months in 5 years (60)

    $35150 / 60 = $585

    Therefore, you have to pay $585 per month.
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