To Purchase a new truck , you borrow $42000. The bank offers an interest rate of 7.5 % compunded monthly. If you take a 5-years loan and you will be making monthly payments, what is the total amount that must be paid back ? a. What is the number of time periods (n) you should use in solving this problem? b. What rate of interest (i). Per period of time. should be used in solving this problme ? c.Is the present singel amount of money ( P) known ? ( Yes or No ) d. which time value factor should be used to solve this problem ? e. What amount must be paid back each month ? F. what is the total amount that will be paid back over that life of the loan ?
To Purchase a new truck , you borrow $42000. The bank offers an interest rate of 7.5 % compunded monthly. If you take a 5-years loan and you will be making monthly payments, what is the total amount that must be paid back ? a. What is the number of time periods (n) you should use in solving this problem? b. What rate of interest (i). Per period of time. should be used in solving this problme ? c.Is the present singel amount of money ( P) known ? ( Yes or No ) d. which time value factor should be used to solve this problem ? e. What amount must be paid back each month ? F. what is the total amount that will be paid back over that life of the loan ?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
To Purchase a new truck , you borrow $42000. The bank offers an interest rate of 7.5 % compunded monthly. If you take a 5-years loan and you will be making monthly payments, what is the total amount that must be paid back ?
a. What is the number of time periods (n) you should use in solving this problem?
b. What rate of interest (i). Per period of time. should be used in solving this problme ?
c.Is the present singel amount of money ( P) known ? ( Yes or No )
d. which time value factor should be used to solve this problem ?
e. What amount must be paid back each month ?
F. what is the total amount that will be paid back over that life of the loan ?
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