Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000 down and financed the rest, with the agreement to pay nothing for the entire first year and then to pay $586.83 at the end of each month over years 2, 3, and 4 (first payment is in 13th month). a. What nominal interest rate is Aerotron paying on the loan? 8.4 % b. What effective interest rate are they paying? 8.1 % Round your answer to 4 decimal places for a and b. The tolerance is ± 0.0005. c. How much of the 14th month's payment is interest? How much is principal? payment interest = $ ,and principal - $ d. How much of the 18th month's payment is interest? How much is principal? payment interest = $ ,and principal - $ e. How much of the 22nd month's payment is interest? How much is principal? payment interest = $ ,and principal - $
Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000 down and financed the rest, with the agreement to pay nothing for the entire first year and then to pay $586.83 at the end of each month over years 2, 3, and 4 (first payment is in 13th month). a. What nominal interest rate is Aerotron paying on the loan? 8.4 % b. What effective interest rate are they paying? 8.1 % Round your answer to 4 decimal places for a and b. The tolerance is ± 0.0005. c. How much of the 14th month's payment is interest? How much is principal? payment interest = $ ,and principal - $ d. How much of the 18th month's payment is interest? How much is principal? payment interest = $ ,and principal - $ e. How much of the 22nd month's payment is interest? How much is principal? payment interest = $ ,and principal - $
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Solve early a, b and c ,d subparts early and correctly now
![Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000 down and financed the rest,
with the agreement to pay nothing for the entire first year and then to pay $586.83 at the end of each month over years 2, 3, and 4
(first payment is in 13th month).
a. What nominal interest rate is Aerotron paying on the loan?
8.4 %
b. What effective interest rate are they paying?
8.1 %
Round your answer to 4 decimal places for a and b. The tolerance is ± 0.0005.
c. How much of the 14th month's payment is interest? How much is principal?
payment interest = $
,and principal - $
d. How much of the 18th month's payment is interest? How much is principal?
payment interest = $
,and principal - $
e. How much of the 22nd month's payment is interest? How much is principal?
payment interest = $
,and principal - $](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F51673e40-b642-41ed-8f58-73f1dbf4451c%2Ff664a912-b699-43eb-9cf2-d3c136a314f0%2Fb6a735.png&w=3840&q=75)
Transcribed Image Text:Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000 down and financed the rest,
with the agreement to pay nothing for the entire first year and then to pay $586.83 at the end of each month over years 2, 3, and 4
(first payment is in 13th month).
a. What nominal interest rate is Aerotron paying on the loan?
8.4 %
b. What effective interest rate are they paying?
8.1 %
Round your answer to 4 decimal places for a and b. The tolerance is ± 0.0005.
c. How much of the 14th month's payment is interest? How much is principal?
payment interest = $
,and principal - $
d. How much of the 18th month's payment is interest? How much is principal?
payment interest = $
,and principal - $
e. How much of the 22nd month's payment is interest? How much is principal?
payment interest = $
,and principal - $
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