Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

After visiting several automobile dealerships, Richard selects the car he wants. He likes its $12,000 price, but financing through the dealer is no bargain. He

image text in transcribed
image text in transcribed
After visiting several automobile dealerships, Richard selects the car he wants. He likes its $12,000 price, but financing through the dealer is no bargain. He has $2.400 cash for a down payment, so he needs a loan of $9,600. 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 $9,500 for a period of five years at an add-on interest rate of 13 percent a. What is the total interest on Richard's loan? Total interest 5 6.240 b.What is the total cost of the car? Total cost 5.780 c. What is the monthly payment? Monthly payment d. What is the annual percentage rate (APR)? (Enter your answer as a percent rounded to 2 decimal places.) APR After visiting several automobile dealerships, Richard selects the car he wants. He likes its $12,000 price, but financing through the dealer is no bargain. He has $2,400 cash for a down payment, so he needs a loan of $9,600. 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 $9,500 for a period of five years at an add-on Interest rate of 13 percent. a. What is the total interest on Richard's loan? Total interest $ 6,240 b.What is the total cost of the car? Total cost $ 5,760 c. What is the monthly payment? Monthly payment d. What is the annual percentage rate (APR)? (Enter your answer as a percent rounded to 2 decimal places.) APR %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Probability For Risk Management

Authors: Matthew J. Hassett, Donald G. Stewart

2nd Edition

156698548X, 978-1566985482

More Books

Students also viewed these Finance questions

Question

Find the measure of angle RSQ 150 130 80 65 R

Answered: 1 week ago