SOLUTION: Al thinks he will buy his boat this year. If he can afford a loan of $400 per month and the bank charges 5.1% / a compounded monthly. Al wishes to pay off his boat loan in 4 years.

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Question 1083134: Al thinks he will buy his boat this year. If he can afford a loan of $400 per month and the bank charges 5.1% / a compounded monthly. Al wishes to pay off his boat loan in 4 years. How much could he borrow now?
Found 2 solutions by addingup, MathTherapy:
Answer by addingup(3677)   (Show Source): You can put this solution on YOUR website!
4 years = 48 months
400 times 48 = 19200 this is how much he can afford to pay in 4 years, with interest.
:
x(1+(0.051/12))^12*4 = 19200
x(1+0.00425)^48 = 19200
x(1.226) = 19200
x = 15,660.69 this is how much boat he can afford to borrow in order to pay back 400/month
Answer by MathTherapy(10551)   (Show Source): You can put this solution on YOUR website!

Al thinks he will buy his boat this year. If he can afford a loan of $400 per month and the bank charges 5.1% / a compounded monthly. Al wishes to pay off his boat loan in 4 years. How much could he borrow now?
Correct answer: He can borrow:  

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