# Question & Answer: Exercise 6-11 (Part Level Submission)…..

Exercise 6-11 (Part Level Submission)

Buffalo Excavating Inc. is purchasing a bulldozer. The equipment has a price of \$92,800. The manufacturer has offered a payment plan that would allow Buffalo to make 6 equal annual payments of \$20,074.07, with the first payment due one year after the purchase. Collapse question part (a) How much total interest will Buffalo pay on this payment plan? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Don't use plagiarized sources. Get Your Custom Essay on
Question & Answer: Exercise 6-11 (Part Level Submission)…..
GET AN ESSAY WRITTEN FOR YOU FROM AS LOW AS \$13/PAGE

Total interest \$__________

Cost of Equipment = \$92,800
Annual Payment = \$20,074.04
Number of annual payment = 6

Total Amount Paid = 6 * \$20,074.04
Total Amount Paid = \$120,444.24

Total Interest Paid = Total Amount Paid – Cost of Equipment
Total Interest Paid = \$120,444.24 – \$92,800
Total Interest Paid = \$27,644.24

So, Buffalo will pay total interest of \$27,644 on this payment plan.