Answer :
Answer:
loan is paid in 1 year 3 months
total amount paid over life = $2101.35
Step-by-step explanation:
given data
balance = $2,000
annual interest rate = 7.99%
afford to pay = $150 per month
solution
we apply formula for amount of time to pay off debit is
[tex]amount(1+ (rate)^t) - principal( \frac{1-(1+rate)^t}{-rate} )[/tex] = 0 ...........1
here rate is [tex]\frac{0.0799}{12}[/tex] per month
and t is time that is find here
put here all value
[tex]2000(1+ (\frac{0.0799}{12})^t) - 150( \frac{1-(1+\frac{0.0799}{12})^t}{-\frac{0.0799}{12}} )[/tex] = 0
[tex](1+ \frac{0.0799}{12})^t (\frac{799}{9000} - 1 ) = -1[/tex]
take log both side
t × log ( [tex]1+ \frac{0.0799}{12}[/tex] ) = - log ( [tex]\frac{8201}{9000}[/tex] )
t = 14.009
so loan is paid in 1 year 3 months
and
total amount paid over life of debit is
total amount paid over life = $14.009 × 150
total amount paid over life = $2101.35