Financial Planning Exercise 8 Calculating payments, interest, and APR on auto loan After careful comparison shopping, Isabella Green decides to buy a new Toyota Camry. With some options added, the car has a price of $22,500 - including plates and taxes. Because she can't afford to pay cash for the car, she will use some savings and her old car as a trade-in to put down $7,500. She plans to finance the rest with a $15,000, 60-month loan at a simple interest rate of 8.5 percent. What will her monthly payments be? Round the answer to the nearest cent.

$____ per month

How much total interest will Isabella pay in the first year of the loan? Round the answer to the nearest cent.

$________

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

$_______

What is the APR on this loan? Round the answer to 1 decimal place.

_______%

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 18 months.

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 credit union. Round the answer to 2 decimal places. ______%

Compute the monthly payments for the loan from the furniture store. 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. ____ %

Which is more important: low payments or a low APR?