Question
Because of a job change, Finn McBryde has just relocated to the southeastern United States. He sold his furniture before he moved, so he's now
Because of a job change, Finn McBryde has just relocated to the southeastern United States. He sold his furniture before he moved, so he's now shopping for new furnishings. At a local furniture store, he's found an assortment of couches, chairs, tables, and beds that he thinks would look great in his new, two-bedroom apartment; the total cost for everything is $5,000. Because of moving costs, Finn is a bit short of cash right now, so he's decided to take out an installment loan for $5,000 to pay for the furniture. The furniture store offers to lend him the money for 48 months at an add-on interest rate of 9 percent. The credit union at Finn's firm offers to lend him the money - they'll give him the loan at a simple interest rate of 11.5 percent, but only for a term of 24 months.
Compute the monthly payments for the loan from the furniture store. Round the answer to the nearest cent.
$ ____per month
Compute the monthly payments for the loan from the credit union. Round the answer to the nearest cent.
$____ per month
Determine the APR for the loan from the furniture store. Round the answer to 2 decimal places.
___________%
Determine the APR for the loan from the credit union. Round the answer to 2 decimal places.
__________%
Which is more important: low payments or a low APR?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started