Chapter 7 Financial Planning Exercise 10 Calculating payments, interest, and APR on auto loan

After careful comparison shopping, Noah Griffin decides to buy a new Toyota Camry. With some options added, the car has a price of $29,638 - 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 $10,138. Noah plans to finance the rest with a $19,500, 60-month loan at a simple interest rate of 6 percent.

1. What will his monthly payments be? Round the answer to the nearest cent.

   $ per month

2. 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.)

   $

3. How much interest will Noah pay over the full (60-month) life of the loan? Round the answer to the nearest cent.

   $

4. What is the APR on this loan? Round the answer to 2 decimal places.

   %