Julio buys a koi fish pond (and fish to put in it) for his wife on their anniversary. He pays $8,000 for the pond with $2,000 down. The dealer charges add-on-interest of 3.5% per year, and Julio agrees to pay the loan with 36 equal monthly payments. Use this information for Exercise 7-10.
Julio buys a koi fish pond (and fish to put in it) for his wife on their anniversary. He pays $8,000 for the pond with $2,000 down. The dealer charges add-on-interest of 3.5% per year, and Julio agrees to pay the loan with 36 equal monthly payments. Use this information for Exercise 7-10.
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
Problem 1PS
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I need help setting up question 7
Transcribed Image Text:**Example Calculation: Koi Fish Pond Financing**
Julio buys a koi fish pond (and fish to put in it) for his wife on their anniversary. He pays $8,000 for the pond with $2,000 down. The dealer charges add-on-interest of 3.5% per year, and Julio agrees to pay the loan with 36 equal monthly payments. Use this information for Exercise 7-10.
**7. Calculate the total amount of interest he will pay.**
**8. Determine the monthly payment.**
**9. Identify the APR value (to the nearest half percent).**
In this scenario, you are asked to use the given financial details to find specific loan-related values. You will need to apply your understanding of add-on interest rates, monthly payment calculations, and APR (Annual Percentage Rate) to solve these exercises.
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