To find the monthly payment, we need to calculate the principal amount that will be amortized and the interest rate per period.
Principal amount = Total cost - Down payment
Principal amount = $20842 - ($20842 * 0.10)
Principal amount = $20842 - $2084.20
Principal amount = $18757.80
Number of periods = 14 years * 12 months per year
Number of periods = 168 months
Monthly interest rate = (1 + interest rate)^periods - 1
Monthly interest rate = (1 + 0.066/12)^168 - 1
Monthly payment = Principal amount * Monthly interest rate / (1 - (1 + Monthly interest rate)^(-Number of periods))
Monthly payment = $18757.80 * [((1 + 0.066/12)^168 - 1) / (1 - (1 + 0.066/12)^(-168))]
Using the formula, the monthly payment is approximately $176.40.
To find the total interest paid, we can subtract the principal amount from the total amount paid over the 14-year period.
Total amount paid = Monthly payment * Number of periods
Total amount paid = $176.40 * 168
Total amount paid = $29635.20
Interest paid = Total amount paid - Principal amount
Interest paid = $29635.20 - $18757.80
The interest paid is approximately $10877.40.
A sailboat costs 20842$ You pay 10% down and amortize the rest with equal monthly payments over a 14 -year period. If you must pay 6.6% compounded monthly.
what is your monthly payment?
How much interest will you pay?
1 answer