Comparing payments and APRs of financing alternatives Because of a job change, Finn McBryde has just relocated to the southeastern United States. He sold his furniture before he moved, so he's now shopping for new furnishings. At a local furniture store, he's found an assortment of couches, chairs, tables, and beds that he thinks would look great in his new, two-bedroom apartment; the total cost for everything is $6,400. Because of moving costs, Finn is a bit short of cash right now, so he's decided to take out an installment loan for $6,400 to pay for the furniture. The furniture store offers to lend him the money for 48 months at an add-on interest rate of 8.5 percent. The credit union at Finn's firm offers to lend him the money - they'll give him the loan at a simple interest rate of 13 percent, but only for a term of 24 months. Compute the monthly payments for the loan from the furniture store. Round the answer to the nearest cent. ________$ per month Compute the monthly payments for the loan from the credit union. Round the answer to the nearest cent. ___________$ per month Determine the APR for the loan from the furniture store. Round the answer to 2 decimal places. ___________ % Determine the APR for the loan from the credit union. Round the answer to 2 decimal places. ____________% Which is more important: low payments or a low APR? _______________________________
Comparing payments and APRs of financing alternatives
Because of a job change, Finn McBryde has just relocated to the southeastern United States. He sold his furniture before he moved, so he's now shopping for new furnishings. At a local furniture store, he's found an assortment of couches, chairs, tables, and beds that he thinks would look great in his new, two-bedroom apartment; the total cost for everything is $6,400. Because of moving costs, Finn is a bit short of cash right now, so he's decided to take out an installment loan for $6,400 to pay for the furniture. The furniture store offers to lend him the money for 48 months at an add-on interest rate of 8.5 percent. The credit union at Finn's firm offers to lend him the money - they'll give him the loan at a simple interest rate of 13 percent, but only for a term of 24 months.
- Compute the monthly payments for the loan from the furniture store. Round the answer to the nearest cent.
________$ per month
Compute the monthly payments for the loan from the credit union. Round the answer to the nearest cent.
___________$ per month
- Determine the APR for the loan from the furniture store. Round the answer to 2 decimal places.
___________ %
Determine the APR for the loan from the credit union. Round the answer to 2 decimal places.
____________%
- Which is more important: low payments or a low APR?
_______________________________
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
