Question

Suppose that you borrow ?$17,000 for five years at 8?% toward the purchase of a car....

Suppose that you borrow ?$17,000 for five years at 8?% toward the purchase of a car. Find the monthly payments and the total interest for the amortized loan.

The monthly payment is ?$ . ?

(Do not round until the final answer. Then round to the nearest cent as? needed.)

The total interest for the loan is ?$ . ?

(Use the answer from part a to find this answer. Round to the nearest cent as? needed.)

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Homework Answers

Answer #1


The monthly payment is $344.70

Using financial calculator BA II Plus - Input details:

#

I/Y = Rate = 8/12 =

0.666667

FV = Future value =

$0

N = Total payment term = 12 x 5 Years =

                          60

PV = Present value of loan =

-$17,000

CPT > PMT = Monthly Payment =

$344.70

The total interest on loan = PMT x N - PV

The total interest on loan = 344.70 x 60 - 17000

The total interest on loan = $3,682.00

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