Question

Eli made a down payment of $1,750 on a jet ski with a purchase price of $9,925. The balance was paid for using a five-year installment loan. If the interest rate on the loan is 11.4%, what is the total cost of the jet ski

Answer 1

simple or compound interest

Answer 2

Simple I guess, cause nothing was mentioned about compunding

Answer 3

(9925-1750)*(.114)(4) + 9925
interest on the 4 years + the original price

Answer 4

So the times 4 would be exponet of 4 correct/

Answer 5

no exponent in simple interest - do you want compound interest?

Answer 6

No, I believe its simple, because usually compound interest says compoundly (something, like annually, monthly, daily, etc).. So I would just mutiply 4 instead of exponet?

Answer 7

(9925-1750)(1+0.114)^4 + 9925 compound interest for the 4 years plus the puchase price

Answer 8

yes, just multiply for simple. you can assume compunding annually for annual interest but you are right, they usually state the compounding.

Answer 9

I got 13,652.8, but that isnt an option for an answer?

Answer 10

My options are , $9,106.95

$10,762.80

$12,512.80

$13,066.80


So would it be $13,066.80?

Answer 11

sorry, 5 years not 4
14584.75
which is also not one of the choices

Answer 12

Hmm. I have no idea!

Answer 13

I have a couple other questions Im stumped on as well

Answer 14

Payment = (Loan amount x Interest) ÷ (Payments per Year x (1 -- (1 + (Interest) ÷ Payments per Year)) raised to the power of negative Payments per Year x Length of Loan))

Read more: Installment Loan Formula | eHow.com http://www.ehow.com/facts_4843598_installment-loan-formula.html#ixzz2HuILEEMD

Answer 15

But thats not what the lesson was about. The lessson was simple and compound interest

Answer 16

check the numbers you typed with the original problem. maybe you mistyped a number???

Answer 17

Nope, that is the specific question

Answer 18

sorry, I tried fiddling to see if I could get one of the choices but I am not sure