Question

Megan bought a car for $12,500. She made a down payment of
$3,500 and financed the rest. If she made 48 payments of $240
each, how much interest did she pay?

Answer 1

First, we need to calculate the total amount financed by subtracting the down payment from the total cost of the car:
Total amount financed = $12,500 - $3,500 = $9,000

Next, we calculate the total amount paid over the 48 payments:
Total amount paid = $240 * 48 = $11,520

The total interest paid is the difference between the total amount paid and the total amount financed:
Total interest paid = $11,520 - $9,000 = $2,520

Therefore, Megan paid $2,520 in interest over the course of the 48 payments.