Josiah needs to borrow $20,000 to purchase a new car. How much interest will he
ID: 2820401 • Letter: J
Question
Josiah needs to borrow $20,000 to purchase a new car. How much interest will he pay over the life of the loan if he makes payments as agreed over 4 years (monthly payments) at a stated rate of 7%?Select one: a. 3000 b. 2100 c. 1400 d. 5600 Josiah needs to borrow $20,000 to purchase a new car. How much interest will he pay over the life of the loan if he makes payments as agreed over 4 years (monthly payments) at a stated rate of 7%?
Select one: a. 3000 b. 2100 c. 1400 d. 5600 Josiah needs to borrow $20,000 to purchase a new car. How much interest will he pay over the life of the loan if he makes payments as agreed over 4 years (monthly payments) at a stated rate of 7%?
Select one: a. 3000 b. 2100 c. 1400 d. 5600
Explanation / Answer
1. Computation of Interest (Option D 5600)
Interest = Principal * Time in months * Rate per month / 100
Interest = $20000 * 48 * 0.5833 / 100
Interest = $5600
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