To purchase $13,200 worth of machinery for her business, Lashonda made a down payment of $1400 and took out a business loan for the rest. After 3 years of paying monthly payments of $358.99, she finally paid off the loan.(a) What was the total amount Lashonda ended up paying for the machinery (including the down payment and monthly payments)?$(b) How much interest did Lashonda pay on the loan?
Question
To purchase 1400 and took out a business loan for the rest. After 3 years of paying monthly payments of (b) How much interest did Lashonda pay on the loan?
Solution
(a) To find the total amount Lashonda ended up paying for the machinery, we need to add the down payment and all the monthly payments she made over the 3 years.
First, let's calculate the total amount of monthly payments. She paid $358.99 per month for 3 years. There are 12 months in a year, so the total number of payments is 3 years * 12 months/year = 36 months.
So, the total amount of monthly payments is 12,923.64.
Now, add the down payment to this amount: 1,400 = $14,323.64.
So, Lashonda ended up paying a total of $14,323.64 for the machinery.
(b) To find out how much interest Lashonda paid on the loan, we need to subtract the original loan amount from the total amount she paid.
The original loan amount was the total cost of the machinery minus the down payment: 1,400 = $11,800.
So, the amount of interest she paid is the total amount she paid minus the original loan amount: 11,800 = $2,523.64.
So, Lashonda paid $2,523.64 in interest on the loan.
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