Compute the monthly payment and the total amount spent for a vehicle that costs $15,700 if you finance the entire purchase over 5 years at an annual rate of 8.25 percent. Calculate the payment if you finance the car for only four years. Finally, calculate the payment for three years. What do you notice about the payment under the different time assumptions?

The monthly payment, PMT, on the 5-year auto loan is $______.(Round to the nearest cent.)

The total amount spent if you financed $15,700 for 5 years at 8.25 percent per year is $_____. (Round to the nearest cent.)

The monthly payment, PMT, on the 4-year auto loan is $_______.(Round to the nearest cent.)

Finally, the monthly payment, PMT, on the 3-year auto loan is $________.(Round to the nearest cent.)

What do you notice about the payment under the different time assumptions?(Select the best choice below.)

A. As the number of payments decreases, the monthly payment decreases, all else equal. The shorter the borrowing period, the lower the monthly payments.

B. As the number of payments decreases, the monthly payment increases, all else equal. The shorter the borrowing period, the higher the monthly payments