Note: Round all answers to the nearest cent when necessary. Calculate the amount financed, the finance charge, and the total deferred payment price (in $) for the following installment loan. Total Purchase (Cash) Monthly Payment Payments Down Amount Number of Finance Deferred Payment Financed Charge Payment Price Price $2,600 $188.69 18
Note: Round all answers to the nearest cent when necessary. Calculate the amount financed, the finance charge, and the total deferred payment price (in $) for the following installment loan. Total Purchase (Cash) Monthly Payment Payments Down Amount Number of Finance Deferred Payment Financed Charge Payment Price Price $2,600 $188.69 18
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
Related questions
Question
![**Transcription and Explanation for Educational Website**
---
**Instructions:**
Note: Round all answers to the nearest cent when necessary.
Calculate the amount financed, the finance charge, and the total deferred payment price (in $) for the following installment loan.
---
**Loan Details Table:**
- **Columns:**
1. **Purchase (Cash) Price**
2. **Down Payment**
3. **Amount Financed**
4. **Monthly Payment**
5. **Number of Payments**
6. **Finance Charge**
7. **Total Deferred Payment Price**
- **Data:**
- **Purchase (Cash) Price:** $2,600
- **Down Payment:** $0
- **Amount Financed:** [Blank] (To be calculated)
- **Monthly Payment:** $188.69
- **Number of Payments:** 18
- **Finance Charge:** [Blank] (To be calculated)
- **Total Deferred Payment Price:** [Blank] (To be calculated)
---
**Explanation of Calculations:**
1. **Amount Financed:**
- Since there is no down payment, the amount financed is the same as the purchase price, i.e., $2,600.
2. **Total Deferred Payment Price:**
- This is calculated by multiplying the monthly payment by the number of payments.
- Formula: Total Deferred Payment Price = Monthly Payment x Number of Payments
- Calculation: $188.69 x 18 = $3,396.42
3. **Finance Charge:**
- This is the difference between the Total Deferred Payment Price and the Amount Financed.
- Formula: Finance Charge = Total Deferred Payment Price - Amount Financed
- Calculation: $3,396.42 - $2,600 = $796.42
By completing these calculations, students will understand how much they pay overall compared to the original purchase price and how much extra they pay as a finance charge due to the installment plan.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbf25cb98-8a11-4c21-ba85-92c0b2ab3853%2Fb103639c-6c5a-4828-8a2f-2faf380ad11b%2F21t4c9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Transcription and Explanation for Educational Website**
---
**Instructions:**
Note: Round all answers to the nearest cent when necessary.
Calculate the amount financed, the finance charge, and the total deferred payment price (in $) for the following installment loan.
---
**Loan Details Table:**
- **Columns:**
1. **Purchase (Cash) Price**
2. **Down Payment**
3. **Amount Financed**
4. **Monthly Payment**
5. **Number of Payments**
6. **Finance Charge**
7. **Total Deferred Payment Price**
- **Data:**
- **Purchase (Cash) Price:** $2,600
- **Down Payment:** $0
- **Amount Financed:** [Blank] (To be calculated)
- **Monthly Payment:** $188.69
- **Number of Payments:** 18
- **Finance Charge:** [Blank] (To be calculated)
- **Total Deferred Payment Price:** [Blank] (To be calculated)
---
**Explanation of Calculations:**
1. **Amount Financed:**
- Since there is no down payment, the amount financed is the same as the purchase price, i.e., $2,600.
2. **Total Deferred Payment Price:**
- This is calculated by multiplying the monthly payment by the number of payments.
- Formula: Total Deferred Payment Price = Monthly Payment x Number of Payments
- Calculation: $188.69 x 18 = $3,396.42
3. **Finance Charge:**
- This is the difference between the Total Deferred Payment Price and the Amount Financed.
- Formula: Finance Charge = Total Deferred Payment Price - Amount Financed
- Calculation: $3,396.42 - $2,600 = $796.42
By completing these calculations, students will understand how much they pay overall compared to the original purchase price and how much extra they pay as a finance charge due to the installment plan.
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