Question

Lenny borrowed $45,000 to buy a boat, for 5 years at a 5% interest. After calculating the total interest, what would the total cost for the boat be with interest?

Answer 1

The total cost for the boat be with interest is $56,250.

Total cost

First step

Using this formula

Interest=Principal×Interest rate×Time

Where:

Principal=$45,000

Interest rate=5%

Time=5 years

Let plug in the formula

Interest=$45,000×0.05×5

Interest=11,250

Second step

Total cost:

Total cost=$45,000+$11,250

Total cost=$56,250

Inconclusion the total cost for the boat be with interest is $56,250.

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