Sarah borrowed $20,000 to purchase a car at an annual interest rate of 3.9%. She

Question

Sarah borrowed $20,000 to purchase a car at an annual interest rate of 3.9%. She is to pay to back in equal monthly payments over a 5-year period. Her monthly payments are $367.43. The total interest over the life of the loan will be? Sarah borrowed $20,000 to purchase a car at an annual interest rate of 3.9%. She is to pay to back in equal monthly payments over a 5-year period. Her monthly payments are $367.43. The total interest over the life of the loan will be? Sarah borrowed $20,000 to purchase a car at an annual interest rate of 3.9%. She is to pay to back in equal monthly payments over a 5-year period. Her monthly payments are $367.43. The total interest over the life of the loan will be?

Explanation / Answer

amount borrowed = $ 20,000

monthly payments = $ 367.43

amount paid in 5 years = 367.43 * 12 * 5

= $ 22045.8

so, interest = 22045.8 - 20000

interest = $ 2045.8

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