Hi there
First find the monthly payment using the formula of the present value of annuity ordinary
The formula for PMT is
PMT=pv÷[(1-(1+r/k)^(-n))÷(r/k)]
PMT monthly payment?
Pv present value 4750
R interest rate 0.17
K compounded monthly 12
N=kt where k=12 and t=20/12
N=20
PMT=4,750÷((1−(1+0.17÷12)^(
−20))÷(0.17÷12))=274.4
Total paid
274.40×20=5,488
Interest charged
5,488−4,750=738
Now let's find the interest of the second decision
She paid 2000 So the present value or the loan is 4,750−2,000=2,750
Now use the formula
PMT=2,750÷((1−(1+0.17÷12)^(
−12))÷(0.17÷12))=250.81
Total paid
250.81×12=3,009.72
Interest charged
3,009.72−2,750=259.72
Chuck save in finance charges (interest) by doing this
738−259.72
=478.28....answer
Good luck!
