Answered: 2. Now consider: 4.05% APR on 5 years…

2. Now consider: 4.05% APR on 5 years for $23,000 car a. Estimate the monthly payment (using the average balance method) b. How much would you pay in total for interest?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

2. Now consider: 4.05% APR on 5 years for $23,000 car

a. Estimate the monthly payment (using the average balance method)

b. How much would you pay in total for interest?

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Ab. 143.
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