QuestionJune 16, 2025

A Electrical Contractor uses a small loan to borrow money at 11% interest rate per annum to buy a vehicle that costs 9900 If the contractor pays a down payment of 1067 and the debt is paid over a period of 11 months. What is the interest charged? (Calculate to 2 decimal places.) square

A Electrical Contractor uses a small loan to borrow money at 11% interest rate per annum to buy a vehicle that costs 9900 If the contractor pays a down payment of 1067 and the debt is paid over a period of 11 months. What is the interest charged? (Calculate to 2 decimal places.) square
A Electrical Contractor uses a small loan to borrow money at 11%  interest rate per annum to
buy a vehicle that costs 9900
If the contractor pays a down payment of 1067 and the debt is paid over a period of 11
months. What is the interest charged?
(Calculate to 2 decimal places.)
square

Solution
4.3(330 votes)

Answer

890.67 Explanation 1. Calculate the loan amount Subtract the down payment from the vehicle cost: 9900 - 1067 = 8833. 2. Calculate annual interest Multiply the loan amount by the interest rate: 8833 \times 0.11 = 971.63. 3. Calculate monthly interest Divide the annual interest by 12 months: \frac{971.63}{12} = 80.97. 4. Calculate total interest for 11 months Multiply the monthly interest by 11: 80.97 \times 11 = 890.67.

Explanation

1. Calculate the loan amount<br /> Subtract the down payment from the vehicle cost: $9900 - 1067 = 8833$.<br />2. Calculate annual interest<br /> Multiply the loan amount by the interest rate: $8833 \times 0.11 = 971.63$.<br />3. Calculate monthly interest<br /> Divide the annual interest by 12 months: $\frac{971.63}{12} = 80.97$.<br />4. Calculate total interest for 11 months<br /> Multiply the monthly interest by 11: $80.97 \times 11 = 890.67$.
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