Use your financial calculator to compute the monthly payments for a vehicle that costs $17,500 if you financed the entire purchase over four years at an annual interest rate of 7.75 percent. Also calculate the loan payments assuming rates of 6.75 percent and 8.75 percent. Compute the total amount spent on the vehicle under each assumption.

The monthly payments for a vehicle that costs $17,500 if you financed the entire purchase over four years at an annual interest rate of 7.75 percent is. (Round to the nearest cent.)

The total amount spent on the vehicle if financed for four years at an annual rate of 7.75 percent is.(Round to the nearest cent.)

The monthly payments for a vehicle that costs $17,500 if you financed the entire purchase over four years at an annual interest rate of 6.75 percent is. (Round to the nearest cent.)

The total amount spent on the vehicle if financed for four years at an annual rate of 6.75 percent is. (Round to the nearest cent.)

The monthly payments for a vehicle that costs $17,500if you financed the entire purchase over four years at an annual interest rate of 8.75 percent is. (Round to the nearest cent.)

The total amount spent on the vehicle if financed for four years at an annual rate of 8.75 percent is. (Round to the nearest cent.)

Compare the total amount spent on the vehicle under each assumption.(Select the best choice below.)

A.

The higher the interest rate on the loan, the higher the monthly payment and the higher the total amount of interest paid on a loan. Shopping for thelowest-cost financing available can significantly reduce interest costs as reflected in the monthly payments and total cost for the vehicle.

B.

The higher the interest rate on the loan, the higher the monthly payment and the higher the amount of principal repayment on a loan. Shopping for thelowest-cost financing available can not significantly reduce interest costs as reflected in the monthly payments and total cost for the vehicle.