PFIN 7:STUDENT EDITION-TEXT
7th Edition
ISBN: 9780357033616
Author: Billingsley
Publisher: CENGAGE L
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Question
Chapter 7, Problem 8FPE
a.
Summary Introduction
To calculate: The monthly mortgage payment.
b.
Summary Introduction
To calculate: Total interest paid over full life of the loan.
c.
Summary Introduction
To find out the Annual Percentage Rate of the loan
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After careful comparison shopping, Noah Griffin decides to buy a new Toyota Camry. With some options added, the car has a price of $23,610 - including plates and taxes. Because he can't afford to pay cash for the car, he will use some savings and his old car as a trade-in to put down $7,610. Noah plans to finance the rest with a $16,000, 60-month loan at a simple interest rate of 5 percent.
What will his monthly payments be? Round the answer to the nearest cent.
$ per month
How much total interest will Noah pay in the first year of the loan? Round the answer to the nearest cent. (Use a monthly payment analysis procedure similar to the one in Exhibit 7.7.)
$
How much interest will Noah pay over the full (60-month) life of the loan? Round the answer to the nearest cent.
$
What is the APR on this loan? Round the answer to 2 decimal places.
%
After visiting several automobile dealerships, Richard selects the car he wants. He likes its $10,500 price, but financing through the dealer is no bargain. He has $2,100 cash for a down payment, so he needs an $8,400 loan. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $8,400 for a period of two years at an add-on interest rate of 10 percent.
a) What is the total interest on Richard’s loan?
b) What is the total cost of the car?
c) What is the monthly payment?
d) What is the annual percentage rate (APR)?
I’m confused
Chapter 7 Solutions
PFIN 7:STUDENT EDITION-TEXT
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