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Thread: Loan Amoritization

  1. #1
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    Loan Amoritization

    How do I calculate the interest that I would have to pay over the life of a loan if I take out a 5 year 20000 dollar car loan at 9% a year? I know that I pay monthly at the rate of $415.17.
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  2. #2
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    Re: Loan Amoritization

    Hello, Eraser147!

    No fancy formulas required . . .


    How do I calculate the interest that I would have to pay over the life of a loan
    if I take out a 5-year $20,000 car loan at 9% a year? .I pay $415.17 monthly.

    You borrowed $\displaystyle \$20,\!000.$

    You pay back $\displaystyle \$415.17$ per month for $\displaystyle 60$ months.
    You pay back a total of: $\displaystyle 60 \times \$415.17 \:=\:\$24,\!910.20$

    Therefore, the interest is: $\displaystyle \$24,\!910.20 - 20,\!000 \:=\:\$4,\!910.20$
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    Re: Loan Amoritization

    Thank you, I'm not too good with word problems.
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