Fill in the blanks to complete the sentence. Jarvis is buying a boat that costs $6,000. He has $500 for a down payment. He is deciding between a 2-year loan and a 3-year loan. Use the rates in the table to determine how much money he will save if he chooses the 2-year loan instead of the 3-year loan. Round to the nearest cent.
Answers
Given : Jarvis is buying a boat that costs $6,000. He has $500 for a down payment. He is deciding between a 2-year loan and a 3-year loan.
To Find :
how much money he will save if he chooses a 2 year loan at 2.25 interest rate, or a 3 year loan at 3.0 interest rate.
Solution:
Total Cost = $ 6000
Down Payment = 500 $
Loan Amount = 6000 - 500 = 5500 $
Assuming SI ( simple interest )
2-year loan at 2.25 interest rate
Interest = 5500 * 2 * 2.25 /100 = 247.5 $
3 year loan at 3.0 interest rate.
Interest = 5500 * 3 * 3 /100 = 495 $
Amount Saved in 2Year Loan = 495 - 247.5 = 247.5 $
247 $ 50 cent
Assuming CI
2-year loan at 2.25 interest rate
Amount = 5500 * (1 + 2.25 /100)² = 5,750.284 $
3-year loan at 3 interest rate
Amount = 5500 * (1 + 3 /100)³ = 6,009.999 $
Amount Saved in 2Year Loan = 6,009.999 - 5,750.284
= 259.715 $
= 259.72 $
259 $ 72 cent
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Answer:
Step-by-step explanation:
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