A friend of yours bought a new sports car with a $4,500 down payment plus a $27,000 car loan that is financed at an interest rate of 0.75 a. Calculate the required monthly loan payment on the car. b. How much does your friend still owe on the car loan immediately after she makes the 24th monthly payment? c. If, after the 24th payment, she decides to pay $100 more each month, how many months will it take her to payoff the remaining loan a. The required monthly payment is (Round to the nearest cent.) b. Your friend still owes $ on the car loan. (Round to the nearest dollar) c. It will take her months (Round-up to the nearest month)

A friend of yours bought a new sports car with a $4,500 down payment plus a $27,000 car loan that is financed at an interest rate of 0.75 a. Calculate the required monthly loan payment on the car. b. How much does your friend still owe on the car loan immediately after she makes the 24th monthly payment? c. If, after the 24th payment, she decides to pay $100 more each month, how many months will it take her to payoff the remaining loan a. The required monthly payment is (Round to the nearest cent.) b. Your friend still owes $ on the car loan. (Round to the nearest dollar) c. It will take her months (Round-up to the nearest month)

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

A friend of yours bought a new sports car with a $4,500 down payment plus a $27,000 car loan that is financed at an interest rate of 0.75% per month for 60 months.
a. Calculate the required monthly loan payment on the car.
b. How much does your friend still owe on the car loan immediately after she makes the 24th monthly payment?
c. If, after the 24th payment, she decides to pay $100 more each month, how many months will it take her to payoff the remaining loan she owes?
a. The required monthly payment is (Round to the nearest cent.)
b. Your friend still owes $on the car loan. (Round to the nearest dollar.)
c. It will take her months (Round-up to the nearest month)

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