# Evan purchased a boat for $8,825. He made a down payment of$2,500. He applied for a three-year installment loan with an interest rate of 10.2%. What is the total cost of the boat after three years?

Nov 22, 2015

Assuming the 3 year loan is annual payments ...

#### Explanation:

Amount of Loan $= 8825 - 2500 = 6325$

Annual Payment $= \frac{6325}{\frac{1 - \frac{1}{1 + 0.102} ^ 3}{0.102}} = 2552.34$

Total Cost $= 2500 + 2552.34 \times 3 = 10157.02$

Hope that helped