nvestigate the effect of the term on simple interest amortized auto loans by finding the monthly payment and the total interest for a loan of $16,000 at 9 7/8% interest if the term is the following. (Round your answers to the nearest cent.) (a) three years payment total interest (b) four years payment $ total interest $ (c) five years payment $ total interest $
nvestigate the effect of the term on simple interest amortized auto loans by finding the monthly payment and the total interest for a loan of $16,000 at 9 7/8% interest if the term is the following. (Round your answers to the nearest cent.) (a) three years payment total interest (b) four years payment $ total interest $ (c) five years payment $ total interest $
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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Investigate the effect of the term on simple interest amortized auto loans by finding the monthly payment and the total interest for a loan of $16,000 at 9 7/8% interest if the term is the following. (Round your answers to the nearest cent.)
(a) three years
payment | |
total interest |
(b) four years
payment | $ |
total interest | $ |
(c) five years
payment | $ |
total interest | $ |
Expert Solution
Step 1
When a lender lends money to a borrower, he charges interest on the amount borrowed. Depending on the terms of the contract, the borrowing rate can be fixed or flexible. The borrower is under the obligation to pay the borrowed amount with interest on a certain date.
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