ramon hernandez saw the following advertisement for a used volkswagen bug and decided to work out the numbers to be sure the ad had no errors. cash price $7,880 down payment $0 annual percentage rate 14.53% deferred price $11,131.80 or 60 payments at $185.53 per month a. calculate the amount financed: b. calculate the finance charge. (round your answer to the nearest cent.): c. calculate the apr by table lookup. (use table 14.1(b).) (round your answers to 2 decimal places.): d. calculate the monthly payment by formula. (round your answer to the nearest cent.): Calculate the monthly payment by table lookup at 14.50% (Use table 14.2 round your answer to the nearest cent):
ramon hernandez saw the following advertisement for a used volkswagen bug and decided to work out the numbers to be sure the ad had no errors. cash price $7,880 down payment $0 annual percentage rate 14.53% deferred price $11,131.80 or 60 payments at $185.53 per month a. calculate the amount financed: b. calculate the finance charge. (round your answer to the nearest cent.): c. calculate the apr by table lookup. (use table 14.1(b).) (round your answers to 2 decimal places.): d. calculate the monthly payment by formula. (round your answer to the nearest cent.): Calculate the monthly payment by table lookup at 14.50% (Use table 14.2 round your answer to the nearest cent):
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
ramon hernandez saw the following advertisement for a used volkswagen bug and decided to work out the numbers to be sure the ad had no errors. cash price $7,880 down payment $0 annual percentage rate 14.53% deferred price $11,131.80 or 60 payments at $185.53 per month
a. calculate the amount financed:
b. calculate the finance charge. (round your answer to the nearest cent.):
c. calculate the apr by table lookup. (use table 14.1(b).) (round your answers to 2 decimal places.):
d. calculate the monthly payment by formula. (round your answer to the nearest cent.):
Calculate the monthly payment by table lookup at 14.50% (Use table 14.2 round your answer to the nearest cent):
Transcribed Image Text:### Table 14.2: Loan Amortization Table
The table displays the monthly payment per $1,000 of loan principal and interest on an installment loan at various interest rates and terms.
**Terms in months** specify the duration of the loan. The columns represent different interest rates, ranging from 7.50% to 16.00%. Payments are listed in dollars.
#### Interest Rates and Monthly Payments:
- **7.50% to 12.00%**
| Terms (months) | 7.50% | 8.00% | 8.50% | 9.00% | 10.00% | 10.50% | 11.00% | 11.50% | 12.00% |
|----------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| 6 | 170.34 | 170.58 | 170.83 | 171.20 | 171.56 | 171.81 | 172.05 | 172.30 | 172.55 |
| 12 | 86.76 | 86.99 | 87.22 | 87.46 | 87.92 | 88.15 | 88.38 | 88.62 | 88.85 |
| 18 | 58.92 | 59.15 | 59.37 | 59.60 | 60.06 | 60.29 | 60.52 | 60.75 | 60.98 |
| 24 | 45.00 | 45.23 | 45.45 | 45.68 | 46.14 | 46.36 | 46.58 | 46.81 | 47.03 |
| 30 | 36.60 | 36.89 | 37.12 | 37.35 | 37.81 | 38.04 | 38.28 | 38.51 | 38.75 |
| 36 | 31.11 | 31.34 | 31.57 |
Transcribed Image Text:This table, labeled "TABLE 14.1," provides information on the finance charge per $100 of amount financed based on different numbers of payments and Annual Percentage Rates (APR). The table is structured to show the finance charge in dollars for various combinations of payment numbers and interest rates.
### Table Breakdown:
- **Columns:**
- Represent different Annual Percentage Rates (APR), ranging from 14.00% to 17.75%.
- **Rows:**
- Correspond to different numbers of payments, starting from 1 up to 60.
### Example Interpretation:
1. **Number of Payments:** Refers to how many installments the total amount is divided into.
2. **APR:** The column headers indicate the annual percentage rate applied.
3. **Finance Charge:** Each cell shows the finance charge per $100 of amount financed for a specific number of payments at a given APR.
For example, if you have 12 payments and an APR of 15.00%, the corresponding finance charge is $8.70 per $100 financed.
### Usage:
- This table can be used to estimate the cost of financing a loan by quickly determining the finance charge applicable based on the selected terms (number of payments and interest rate).
This descriptive explanation can help individuals understand the cost implications based on varying finance terms.
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