11. equipment loan for $20,000 down payment of 20 percent 12 percent APR for 30 months a. What is the down payment? b. What is the amount of the loan? c. What are the monthly payments? d. What is the finance charge? a. b. C. d.
11. equipment loan for $20,000 down payment of 20 percent 12 percent APR for 30 months a. What is the down payment? b. What is the amount of the loan? c. What are the monthly payments? d. What is the finance charge? a. b. C. d.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:11. equipment loan for $20,000
down payment of 20 percent
12 percent APR for 30 months
a. What is the down payment?
b. What is the amount of the loan?
c. What are the monthly payments?
d. What is the finance charge?
a.
b.
C.
d.
Expert Solution
Introduction
The term loan refers to a type of credit vehicle in which a sum of money is lent to another party in exchange for future repayment of the value or principal amount. In many cases, the lender also adds interest and/or finance charges to the principal value which the borrower must repay in addition to the principal balance.
Calculation of part a.
Given information:
Total purchase amount = $20,000
Down Payment = 20% of $20,000
=$4,000
Calculation of part b.
Amount of Loan = Total Purchase Amount - Down Payment
Amount of Loan = $20,000 - $4,000
= $16,000
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