Question content area topPart 1Compute the monthly payments for a vehicle that costs$14 comma 10014,100if you financed the entire purchase over44years at an annual interest rate of6.256.25percent. Also, calculate the loan payments assuming rates of5.255.25percent and7.257.25percent. Compare the total amount spent on the vehicle under each assumption. Note: Round intermediate computations to at least five (5) decimal places.Click on the table icon to view the Monthly Installment Loan Payment Factor (MILPF) table:LOADING.... Question content area bottomPart 1The monthly payments for a vehicle that costs$14 comma 10014,100if you financed the entire purchase over44years at an annual interest rate of6.256.25%is$332.76332.76.(Round to the nearest cent.)Part 2The total amount spent on the vehicle if financed for44years at an annual rate of6.256.25%is$15972.4815972.48.(Round to the nearest cent.)Part 3The monthly payments for a vehicle that costs$14 comma 10014,100if you financed the entire purchase over44years at an annual interest rate of5.255.25%is$326.274326.274.(Round to the nearest cent.)Part 4The total amount spent on the vehicle if financed for44years at an annual rate of5.255.25%is$15661.1515661.15.(Round to the nearest cent.)Part 5The monthly payments for a vehicle that costs$14 comma 10014,100if you financed the entire purchase over44years at an annual interest rate of7.257.25%is$339.246339.246.(Round to the nearest cent.)Part 6The total amount spent on the vehicle if financed for44years at an annual rate of7.257.25%is$16283.80816283.808.(Round to the nearest cent.)Part 7Compare the total amount spent on the vehicle under each assumption. (Select the best choice below.) A.The higher the interest rate on the loan, the higher the monthly payment and the higher the amount of principal repayment on a loan. Shopping for the lowest-cost financing available can not significantly reduce interest costs as reflected in the monthly payments and total cost for the vehicle. B.The higher the interest rate on the loan, the higher the monthly payment and the higher the total amount of interest paid on a loan. Shopping for the lowest-cost financing available can significantly reduce interest costs as reflected in the monthly payments and total cost for the vehicle.

Loan amortization is the process of paying off a debt over time through regular payments. With each…

Answered: Compute the monthly payments for a…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 7FPE: Calculating interest and APR of installment loan. Assuming that interest is the only finance charge,...

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Question content area top

Part 1

Compute the monthly payments for a vehicle that costs

$14 comma 10014,100

if you financed the entire purchase over

years at an annual interest rate of

6.256.25

percent. Also, calculate the loan payments assuming rates of

5.255.25

percent and

7.257.25

percent. Compare the total amount spent on the vehicle under each assumption.

Note: Round intermediate computations to at least five (5) decimal places.

Click on the table icon to view the Monthly Installment Loan Payment Factor (MILPF) table:

Question content area bottom

Part 1

The monthly payments for a vehicle that costs

$14 comma 10014,100

if you financed the entire purchase over

years at an annual interest rate of

6.256.25%

$332.76332.76.

(Round to the nearest cent.)

Part 2

The total amount spent on the vehicle if financed for

years at an annual rate of

6.256.25%

$15972.4815972.48.

(Round to the nearest cent.)

Part 3

The monthly payments for a vehicle that costs

$14 comma 10014,100

if you financed the entire purchase over

years at an annual interest rate of

5.255.25%

$326.274326.274.

(Round to the nearest cent.)

Part 4

The total amount spent on the vehicle if financed for

years at an annual rate of

5.255.25%

$15661.1515661.15.

(Round to the nearest cent.)

Part 5

The monthly payments for a vehicle that costs

$14 comma 10014,100

if you financed the entire purchase over

years at an annual interest rate of

7.257.25%

$339.246339.246.

(Round to the nearest cent.)

Part 6

The total amount spent on the vehicle if financed for

years at an annual rate of

7.257.25%

$16283.80816283.808.

(Round to the nearest cent.)

Part 7

Compare the total amount spent on the vehicle under each assumption. (Select the best choice below.)

The higher the interest rate on the loan, the higher the monthly payment and the higher the amount of principal repayment on a loan. Shopping for the lowest-cost financing available can not significantly reduce interest costs as reflected in the monthly payments and total cost for the vehicle.

The higher the interest rate on the loan, the higher the monthly payment and the higher the total amount of interest paid on a loan. Shopping for the lowest-cost financing available can significantly reduce interest costs as reflected in the monthly payments and total cost for the vehicle.

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