Saved Problem 6-71 Calculating EAR with Add-On Interest (LO3) This problem illustrates a deceptive way of quoting interest rates called add-on interest. Imagine that you see an advertisement for Crazy Judy's Stereo City that reads something like this: "$1,160 Instant Credit! 17% Simple Interest! Three Years to Pay! Low, Low Monthly Payments!" You're not exactly sure what all this means and somebody has spilled ink over the APR on the loan contract, so you ask the manager for clarification. Judy explains that if you borrow $1,160 for three years at 17% interest, in three years you will owe: $1,160 x 173 $1,160 x 1.60161 = $1,857.87 Now, Judy recognizes that coming up with $1,857.87 all at once might be a strain, so she lets you make "low, low monthly payments" of $1,857.87/36 = $51.61 per month, even though this is extra bookkeeping work for her. What is the APR (monthly) on this loan? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Annual percentage rate % What is the EAR? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Effective percentage rate %

Saved Problem 6-71 Calculating EAR with Add-On Interest (LO3) This problem illustrates a deceptive way of quoting interest rates called add-on interest. Imagine that you see an advertisement for Crazy Judy's Stereo City that reads something like this: "$1,160 Instant Credit! 17% Simple Interest! Three Years to Pay! Low, Low Monthly Payments!" You're not exactly sure what all this means and somebody has spilled ink over the APR on the loan contract, so you ask the manager for clarification. Judy explains that if you borrow $1,160 for three years at 17% interest, in three years you will owe: $1,160 x 173 $1,160 x 1.60161 = $1,857.87 Now, Judy recognizes that coming up with $1,857.87 all at once might be a strain, so she lets you make "low, low monthly payments" of $1,857.87/36 = $51.61 per month, even though this is extra bookkeeping work for her. What is the APR (monthly) on this loan? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Annual percentage rate % What is the EAR? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Effective percentage rate %

Chemistry

10th Edition

ISBN:9781305957404

Author:Steven S. Zumdahl, Susan A. Zumdahl, Donald J. DeCoste

Publisher:Steven S. Zumdahl, Susan A. Zumdahl, Donald J. DeCoste

Chapter1: Chemical Foundations

Section: Chapter Questions

Problem 1RQ: Define and explain the differences between the following terms. a. law and theory b. theory and...

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