What is the total lifetime cost for a loan had a principal of $5,500, an interest rate of 7.5% compounded monthly, and a duration of ten years?

Answer: the total lifetime cost for the loan is $11616.4

Step-by-step explanation:

We would apply the formula for determining compound interest which is expressed as

A = P (1+r/n) ^nt

Where

A = total cost of the loan at the end of t years.

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount borrowed.

From the information given,

P = $5,500

r = 7.5% = 7.5/100 = 0.075

n = 12 because it was compounded 12 times in a year.

t = 10 years

Therefore,

A = 5500 (1 + 0.075/12) ^12 * 10

A = 5500 (1 + 0.00625) ^120

A = 5500 (1.00625) ^120

A = $11616.4