Thor is buying a boat for $16,500. He'll make a down payment of $1,500 and finace the rest at 7 1/4% add-on interest making monthly payments for 4 years

Question

you need the orignial formula, the formula with values included, the entire calculated value, and rounded answer.

Answer 1

Add-on interest requires us to calculate the total interest to be paid over 4 years. After deducting the down payment there is $16500-1500=$15000 to pay and the total interest is 4×0.0725×15000=$4350 to be paid over 48 months. That’s $90.625 per month for the interest alone. This is added to 15000/48=$312.50 for the principal (the loan). The monthly payment is therefore 312.50+90.625=$403.125 or, rounded up, $403.13.

Another way to do the calculation is to add the principal to the interest then divide by the number of monthly payments: (15000+4350)/48=19350/48=$403.13 after rounding.