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Jamie wants to borrow $15,000 from south western bank. They offered her a 4-year loan with an apr of 5. 5%. How much will she pay in interest over the life of the loan? (round monthly payment calculations to 2 decimal places. ).

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The total interest Jamie will pay is $348.85/month in interest alone over the life of the loan.

How to calculate amount of interest ?

The principal amount(p) is $15000

The Annual Percentage Rate (r) is 5.5%

The Duration of the Loan (t) is 4 years

Inorder to calcualte Amount of Interest (M)

[tex]M=[(p(r/12)(1+r/12)^{12t}] / [(1+r/12)^{12t} -1][/tex]

[tex]M = [15000(0.055/12)(1+0.055/12)^{12x4}] / [(1+0.055/12)^{12x4}-1][/tex]

M = $348.85

What is the interest?

  • The cost you incur when lending or borrowing money is called interest.
  • Most of the time, interest is expressed as an annual percentage of the loan amount.The loan's interest rate is represented by this percentage.

The total interest Jamie will pay is $348.85/month in interest alone over the life of the loan.

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