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Math Help - Total Interest on the Loan?

  1. #1
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    Total Interest on the Loan?

    E-Loan, an online lending service, recently offered 36-month auto loads at 7.56
    compounded monthly to applicants with good credit rating. If you have a good
    credit rating and can afford monthly payments of $350, how much can you borrow
    from E-Loan? What is the total interest you will pay for this loan?
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  2. #2
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    Quote Originally Posted by ndcruz View Post
    E-Loan, an online lending service, recently offered 36-month auto loads at 7.56
    compounded monthly to applicants with good credit rating. If you have a good
    credit rating and can afford monthly payments of $350, how much can you borrow
    from E-Loan? What is the total interest you will pay for this loan?
    I used this formula for calculating monthly car payments:

    MP=\frac{P(\frac{r}{12})}{1-\left(1+\frac{r}{12}\right)^{-m}}

    350=\frac{P(\frac{.0756}{12})}{1-\left(1+\frac{.0756}{12}\right)^{-36}}

    And after solving this gigantic mess, I found the maximum principal P would be $11,241.81.

    To find the total interest you would pay for this loan, multiply $350 by 36 months and subtract that from $11,241.81.
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