Respuesta :
If Dana paid a total of $18,321.60, then the amount that she paid for in service charges will be $730.08
What is Compound interest?
Compound interest is a method of calculating the interest charge. In other words, it is the addition of interest on interest.
For service charge
[tex]\rm Pv = PMT[(1 - (1 + (r/k))^{-kn}) / (r/k)][/tex]
Where;
Pv is the amount of the loan = $15400
PMT is monthly payment
R is interest rate = 6.68% = 0.0668
K is number of times compounded monthly = 12
N is time = 4years
PMT the subject of the formula gives
[tex]PMT = Pv/ [(1 - (1 + (r/k))^{-kn}) /(r/k)][/tex]
PMT = 15,400 ÷ ((1 − (1 + 0.0668 ÷ 12)^(−12 × 4)) ÷ (0.0668 ÷ 12))
PMT = 366.49
Thus, the total amount paid
A = 366.49 × 12months × 4years
A = $17,591.52
Thus, the Service charge is
S.C = 18,321.60 − 17,591.52
S.C = $730.08
Read more about Compound interest;
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