Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

After visiting several automobile dealerships, Richard selects the used car he wants. He likes its $ 1 1 , 8 0 0 price, but financing

After visiting several automobile dealerships, Richard selects the used car he wants. He likes its $11,800 price, but financing through the dealer is no bargain. He has $2,000 cash for a down payment, so he needs an $9,800 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 $9,800 for a period of four years at an add-on interest rate of 13 percent.
a. What is the total interest on Richard's loan?
Note: Do not round intermediate calculations. Round your answer to the nearest whole number.
Answer is complete but not entirely correct.
\table[[Total interest,$
image text in transcribed

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

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Students also viewed these Finance questions