Ray Flagg took out a 60-month fixed installment loan of$12,000 to open a new pet store. He paid no money down and began making monthly payments of $232. Ray's business does better than expected and instead of making his 36th payment, Ray wishes to repay his loan in full. Complete parts a) through c)

a) Determine the APR of the installment loan.

APR = ____ %

b) How much interest will Ray save by paying off the loanearly? (Use the actuarial method)

Interest saved = $______

c) What is the total amount due to pay off the loan?

The total amount due = $______
 

 

table of interest rates Annual Percentage Rate Number of 3.0% 3.5% 4.0% 4.5% 5.0% Payments 5.5% 6.0% 6.5% 7.0% (Finance charge per $100 of amount financed) 5.29 24 3.15 3.69 4.22 4.75 5.83 6.37 6.91 7.45 8.61 10.34 11.16 30 3.92 4.58 5.25 5.92 6.59 7.26 7.94 9.30 36 4.69 5.49 6.29 7.09 7.90 8.71 9.52 48 6.24 7.31 8.38 9.46 10.54 11.63 12.73 13.83 14.94 60 7.81 9.15 10.50 11.86 13.23 14.61 16.00 17.40 18.81