Maths

[Guest]

Lush Gardens Co. bought a new truck for \$58,000. It paid \$5,800 of this amount as a down payment and financed the balance at 5.75% compounded semi-annually. If the company makes payments of \$1,500 at the end of every month, how long will it take to settle the loan?

[Guest]

-- -They initially owe \$58000- 5800= \$52200. The interest is initially 0.0575(52200)= \$3001.50 per year so \$1500.75 the first six months. They pay \$1500 per month so will have paid \$9000 in six months. \$1500.75 of that went to interest so they will still owe $52200+ 1500.75- 9000= 53700.75- 9000= \$44700.75.

The second six months the interest is 0.0575(44700.5)= \$2570.28 per year so \$1285.14 the next six months. They pay \$9000 over that six months so still owe \$44700.5+ 1285.14- 9000= $45985.64- 9000= $36985.64.

The third six months the interest is 0.0575(36985.64)= \$2126.67 per year so \$1063,35 the next six months. They pay \$9000 over that six months so still owe \$36985.64+1063.35- 9000= $38048.27- 9000= $27048.27.

Continue like that, every six months until the debt is paid.

[billyrauch]

That is very helpful! thank you

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