Question
Tuck took out a loan of $61400.00 to purchase a truck. The term of the loan is 3.5 years. How much will Tuck repay in total if the interest rate is 7.85% per annum, compounded monthly
Answers
GPT 3.5
To find the total amount Tuck will repay, we need to calculate the compound interest on the loan amount.
First, let's convert the interest rate to a monthly rate. The monthly interest rate is the annual interest rate divided by 12. So, we have:
Monthly interest rate = (7.85% / 100) / 12 = 0.0065
Next, let's calculate the total number of periods Tuck will make payments, which is the total number of years multiplied by 12. So, we have:
Total number of periods = 3.5 * 12 = 42
Now, we can use the compound interest formula to calculate the total repayment amount:
Total repayment amount = Loan amount * (1 + Monthly interest rate)^Total number of periods
Total repayment amount = $61400 * (1 + 0.0065)^42
Total repayment amount = $61400 * (1.0065)^42
Total repayment amount ≈ $71,105.92
Therefore, Tuck will repay a total amount of approximately $71,105.92.
First, let's convert the interest rate to a monthly rate. The monthly interest rate is the annual interest rate divided by 12. So, we have:
Monthly interest rate = (7.85% / 100) / 12 = 0.0065
Next, let's calculate the total number of periods Tuck will make payments, which is the total number of years multiplied by 12. So, we have:
Total number of periods = 3.5 * 12 = 42
Now, we can use the compound interest formula to calculate the total repayment amount:
Total repayment amount = Loan amount * (1 + Monthly interest rate)^Total number of periods
Total repayment amount = $61400 * (1 + 0.0065)^42
Total repayment amount = $61400 * (1.0065)^42
Total repayment amount ≈ $71,105.92
Therefore, Tuck will repay a total amount of approximately $71,105.92.