1. A Volvo car dealer wishes to sell a 1995 Volvo 740 GLE to a customer for $10,000.00 which includes the sales tax. The customer can only make a down payment of 20% of the total cost of the car at the time of the sale. The customer has gone to his bank to finance the rest of the purchases. The bank charges 14% annual interest rate on all car notes to its customers. If the bank requires this customer to pay a monthly car note of $222.40 find: a. The number of months required for the customer to pay off the car loan. (Hint: The months must be an integer number). b. The amount required to pay off the loan at the end of the 8th month.
1. A Volvo car dealer wishes to sell a 1995 Volvo 740 GLE to a customer for $10,000.00 which includes the sales tax. The customer can only make a down payment of 20% of the total cost of the car at the time of the sale. The customer has gone to his bank to finance the rest of the purchases. The bank charges 14% annual interest rate on all car notes to its customers. If the bank requires this customer to pay a monthly car note of $222.40 find: a. The number of months required for the customer to pay off the car loan. (Hint: The months must be an integer number). b. The amount required to pay off the loan at the end of the 8th month.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:1. A Volvo car dealer wishes to sell a 1995 Volvo 740 GLE to a customer for $10,000.00 which
includes the sales tax. The customer can only make a down payment of 20% of the total cost of
the car at the time of the sale. The customer has gone to his bank to finance the rest of the
purchases. The bank charges 14% annual interest rate on all car notes to its customers. If the
bank requires this customer to pay a monthly car note of $222.40 find:
a. The number of months required for the customer to pay off the car loan. (Hint: The
months must be an integer number).
b. The amount required to pay off the loan at the end of the 8th month.
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