After visiting several automobile dealerships, Richard selects the used car he wants. He likes its $12,800 price, but financing through the dealer is no bargain. He has $3,500 cash for a down payment, so he needs an $9,300 loan. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $9,300 for a period o four years at an add-on interest rate of 9 percent. d. What is the annual percentage rate (APR)? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Annual percentage rate %

After visiting several automobile dealerships, Richard selects the used car he wants. He likes its $12,800 price, but financing through the dealer is no bargain. He has $3,500 cash for a down payment, so he needs an $9,300 loan. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $9,300 for a period o four years at an add-on interest rate of 9 percent. d. What is the annual percentage rate (APR)? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Annual percentage rate %

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 8FPE

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