Felix purchased a boat for $9,755. He made a down payment of $875. He applied for a six-year installment loan with an interest rate of 10.4% in the amount of $8,880. What is the total cost of the boat after six years?
Economics - Financial Markets
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The total cost of the boat is $9,755, plus the interest paid over the $8,880, however there is missing data here in terms of how the loan is paid off. Is it paid in monthly payments? Annual payments?
For this type of loans I would assume 12 monthly payments, or 72 payments total, with the interest paid each month. The total interest paid would be $2809.04. The boat would cost 9755 +2809.04= 12564.04, with these assumptions being true...