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: Cengage Learning
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Question
Chapter 7, Problem 8FPE
a.
Summary Introduction
To calculate: The monthly mortgage payment.
b.
Summary Introduction
To calculate: Total interest paid over full life of the loan.
c.
Summary Introduction
To find out the Annual Percentage Rate of the loan
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Calculating payments, interest, and APR on auto loan
After careful comparison shopping, Isabella Green decides to buy a new Toyota Camry. With some options added, the car has a price of $20,500 - including plates and taxes. Because she can't afford to pay cash for the car, she will use some savings and her old car as a trade-in to put down $5,000. She plans to finance the rest with a $15,500, 48-month loan at a simple interest rate of 12 percent.
What will her monthly payments be? Round the answer to the nearest cent.$ per month
How much total interest will Isabella pay in the first year of the loan? Round the answer to the nearest cent.$
How much interest will Isabella pay over the full (48-month) life of the loan? Round the answer to the nearest cent.$
What is the APR on this loan? Round the answer to 1 decimal place. %
Ginny, who lives in Houston, is trying to decide between the following car models:
Brand and Model
Chevy Sonic
Toyota Camry
Ford Escape Hybrid
Dodge 1500 Pickup
Cost
$14,255
17,950
30,570
37,590
She's currently accumulated a down payment of $5,000 and she has determined that she can afford maximum payments of $375 per month. Her
initial research on the current cost of auto loans has found that her lowest cost loan would be made by a bank and would require an interest rate of
6% for five years.
Given this information, the maximum amount that Ginny can afford to pay for her new car is
can afford to purchase, without stretching her budget, is:
OOO
The Chevy Sonic
The Toyota Camry
The Dodge 1500 Pickup
The Ford Escape Hybrid
I
and the most expensive car that she
After careful comparison shopping, Noah Griffin decides to buy a new Toyota Camry. With some options added, the car has a price of $23,610 - including plates and taxes. Because he can't afford to pay cash for the car, he will use some savings and his old car as a trade-in to put down $7,610. Noah plans to finance the rest with a $16,000, 60-month loan at a simple interest rate of 5 percent.
What will his monthly payments be? Round the answer to the nearest cent.
$ per month
How much total interest will Noah pay in the first year of the loan? Round the answer to the nearest cent. (Use a monthly payment analysis procedure similar to the one in Exhibit 7.7.)
$
How much interest will Noah pay over the full (60-month) life of the loan? Round the answer to the nearest cent.
$
What is the APR on this loan? Round the answer to 2 decimal places.
%
Chapter 7 Solutions
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
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