Question

CNot secure ezto.mheducation.com/hm.tpx pps Dell Other bookmarks Ramon Hernandez saw the following advertisement for a used Volkswagen Bug and decided to work out the numbers to be sure the ad had no errors Cash price $7,810 Down payment 10 Annual percentage rate 16.03% Deterred price $11.396 40 or 60 payments at $189 94 per month a. Calculate the amount financed Amount financed b. Calculate the finance charge. (Round your answer to the nearest cent.) Finance change c. Calculate the APR by table lookup (Use e Table 14 1 and Table 14 1b) (Round your answers to 2 decimal places.) 1% and i between APR d. Calculate the montnly Monthly payment by formulaw e. Calculate the monthly payment by table lookup at 16.00% (use Monthly payment by table lookup payment by formula (Round your answer to the nearest cent.) 142) (Round your answer to the nearest cent) eBook & Resources References 4/25/02019 Type here to search

Answer 1

Given:

a) Amount Financed = Selling Price – Down Payment

=$7810 - $0

= 7810

b) Finance Charge = Deferred Price – Amount Financed

= 11396.4 - 7810

= 3586.4 = 3586

c) 60 monthly patments i.e. 5 years

So 5 year rate = Finance charge / Loan amount x 100 = (11396.4 - 7810)/7810 *100

= 3586.4/7810 *100

= 45.92%

APR

d)

Monthly payment = (Finance charges + amount financed)/60

= 3586 +7810 /60

= 189.94

e) As down payment is zero ,the monthly payment cannot be found by table lookup