Respuesta :
The correct statement is that the payments made towards the interest by Dennis on such amount of principal of the car purchase will be computed as $8392.53.
The calculation of the payment of interest made by Dennis will be computed upon the net principal value of the car and deducting such principal amount from the annuity amount.
Calculation of payment of interest
The formula for the calculation of compounded annuity will be calculated on the total value of the car financed, which is calculated as $19834, and the annuity as per the compound interest formula will be,
[tex]\rm Compounded\ Annuity= 19834(1+\dfrac{0.1182}{12})^3^x^1^2\\\\\rm Compounded\ Annuity= 19834(1.00985)^3^6\\\\\rm Compounded\ Annuity= \$28226[/tex]
Now the payment of interest will be as,
[tex]\rm Compound\ Interest= Annuity- Principal\\\\\rm Compound\ Interest=28226-19834\\\\\rm Compound\ Interest=\$8392.53[/tex]
So, the amount of interest paid is $8392.53.
Hence, the correct statement is that the payments made towards the interest by Dennis on such amount of principal of the car purchase will be computed as $8392.53.
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