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 %
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
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![Problem 7-9 Calculating the Total Cost of a Purchase, the Monthly Payment, and an APR [LO7-2]
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 full amount borrowed even though a portion of the principal has been paid back. Richard borrows $9,300 for a period of
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
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc19e37ee-651e-4cd1-88bd-a74de0c5f4a9%2F9aa90019-df8b-41ac-b88f-39c0a6e34aa0%2Faiwj6dr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 7-9 Calculating the Total Cost of a Purchase, the Monthly Payment, and an APR [LO7-2]
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 full amount borrowed even though a portion of the principal has been paid back. Richard borrows $9,300 for a period of
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
%
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