Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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5:1 Answer B questions
Transcribed Image Text:O
Use PMT=
1-
P
+
Ei
has a balance of $4900 and an annual interest rate of 19%. With no further purchases charged to the card and the
balance being paid off over two years, the monthly payment is $247, and the total interest paid is $1028. You can get
a bank loan at 11.5% with a term of three years. Complete parts (a) and (b) below.
to determine the regular payment amount, rounded to the nearest dollar. Your credit card
- nt
a. How much will you pay each month? How does this compare with the credit-card payment each month? Select
the correct choice below and fill in the answer boxes to complete your choice.
(Do not round until the final answer. Then round to the nearest dollar as needed.)
This is $
...
The monthly payments for the bank loan are approximately $
credit-card payments.
a
The monthly payments for the bank loan are approximately $ 162. This is $ 85 less than the monthly
credit-card payments.
b. How much total interest will you pay? How does this compare with the total credit-card interest? Select the
correct choice below and fill in the answer have to complete your choic
more than the monthly
H
77°F
Transcribed Image Text:O
Use PMT=
PA
to determine the regular payment amount, rounded to the nearest dollar. Your credit card
- nt
has a balance of $4900 and an annual interest rate of 19%. With no further purchases charged to the card and the
balance being paid off over two years, the monthly payment is $247, and the total interest paid is $1028. You can get
a bank loan at 11.5% with a term of three years. Complete parts (a) and (b) below.
credit-card payments.
b. How much total interest will you pay? How does this compare with the total credit-card interest? Select the
correct choice below and fill in the answer boxes to complete your choice.
(Use the answer from part a to find this answer. Round
the nearest dollar as needed.)
OA. The total interest paid over 3 years for the bank loan is approximately $
total credit-card interest.
OB. The total interest paid over 3 years for the bank loan is approximately $
total credit-card interest.
a
This is $
This is $
less than the
more than the
77°F
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