Question

E-Loan, an online lending? service, recently offered 60?-month auto loans at 3.9 % compounded monthly to...

E-Loan, an online lending? service, recently offered 60?-month auto loans at 3.9 % compounded monthly to applicants with good credit ratings. If you have a good credit rating and can afford monthly payments of $ 446 how much can you borrow from? E-Loan? What is the total interest you will pay for this? loan?

You can borrow $

?(Round to two decimal? places.)

You will pay a total of $

in interest.???(Round to two decimal? places.)

Homework Answers

Answer #1

The formula used to calculate the fixed monthly payment (P) required to fully amortize a loan of $ L over a term of n months at a monthly interest rate of r is P = L[r(1 + r)n]/[(1 + r)n - 1].

Here, P = $ 446, r = 3.9/1200 = 0.00325 and n = 60 so that 446 = L*0.00325(1.00325)60/[(1.00325)60 -1] = L*0.00325*1.214926778/0.214926778 so that L = 446*0.214926778/0.00325*1.214926778 = $ 24276.83 ( on roundoing off to the nearest cent. Thus, a borrower, with a good credit rating can borrow up to $ 24276.83 if he/she can pay $ 446 per month.

The total amount repaid will be 60 * $ 446 = $ 26760 so that the total amount interest paid will be $ 26760 - $ 24276.83 = $ 2483.17.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
​E-Loan, an online lending​ service, recently offered 60​-month auto loans at 4.5 %compounded monthly to applicants...
​E-Loan, an online lending​ service, recently offered 60​-month auto loans at 4.5 %compounded monthly to applicants with good credit ratings. If you have a good credit rating and can afford monthly payments of $ 511 how much can you borrow from​ E-Loan? What is the total interest you will pay for this​ loan?
​E-Loan, an online lending​ service, recently offered 60​-month auto loans at 6% compounded monthly to applicants...
​E-Loan, an online lending​ service, recently offered 60​-month auto loans at 6% compounded monthly to applicants with good credit ratings. If you have a good credit rating and can afford monthly payments of $296​, how much can you borrow from​ E-Loan? What is the total interest you will pay for this​ loan?
​E-Loan, an online lending​ service, recently offered 36​-month auto loans at 3.6% compounded monthly to applicants...
​E-Loan, an online lending​ service, recently offered 36​-month auto loans at 3.6% compounded monthly to applicants with good credit ratings. If you have a good credit rating and can afford monthly payments of $571​, how much can you borrow from​ E-Loan? What is the total interest you will pay for this​ loan?
A loan is offered with monthly payments and a 15.00 percent APR. what's the loans effective...
A loan is offered with monthly payments and a 15.00 percent APR. what's the loans effective annual rate? (EAR)? do not round intermediate calculations and round your final answer to 2 decimal places.
A loan officer compares the interest rates for 48-month fixed-rate auto loans and 48-month variable-rate auto...
A loan officer compares the interest rates for 48-month fixed-rate auto loans and 48-month variable-rate auto loans. Two independent, random samples of auto loan rates are selected. A sample of eight 48−month fixed−rate auto loans had the following loan rates: 8.65% 7.83% 7.34% 7.59% 8.66% 9.45% 9.22% 7.58% while a sample of five 48−month variable−rate auto loans had loan rates as follows: 7.29% 6.94% 6.91% 6.89% 7.63% Figure 10.7 Excel Output of Testing the Equality of Mean Loan Rates for...
You have an outstanding student loan with required payments of $ 500 per month for the...
You have an outstanding student loan with required payments of $ 500 per month for the next four years. The interest rate on the loan is 8%APR​ (compounded monthly). Now that you realize your best investment is to prepay your student​ loan, you decide to prepay as much as you can each month. Looking at your​ budget, you can afford to pay an extra $ 250 a month in addition to your required monthly payments of$ 500 ​,or $750 in...
Your local bank is offering an interest rate of 5.3% APR, compounded monthly, on a 60-month...
Your local bank is offering an interest rate of 5.3% APR, compounded monthly, on a 60-month loan. If all you can pay is $250 per month, what is the maximum loan you can afford to get for a new car? PLEASE TRY TO BE A SIMPLE AS POSSIBLE, preferably using excel!
You have an outstanding student loan with required payments of $500 per month for the next...
You have an outstanding student loan with required payments of $500 per month for the next four years. The interest rate on the loan is 8% APR​ (compounded monthly). Now that you realize your best investment is to prepay your student​ loan, you decide to prepay as much as you can each month. Looking at your​ budget, you can afford to pay an extra $175 a month in addition to your required monthly payments of $500​, or $675 in total...
You have an outstanding student loan with required payments of $600 per month for the next...
You have an outstanding student loan with required payments of $600 per month for the next four years. The interest rate on the loan is 10% APR (compounded monthly). Now that you realize your best investment is to prepay your student loan, you decide to prepay as much as you can each month. Looking at your budget, you can afford to pay an extra $250 a month in addition to your required monthly payments of $600, or $850 in total...
Problem 5-46 EAR of Add-On Interest Loan (LG7, LG8) To borrow $1,550, you are offered an...
Problem 5-46 EAR of Add-On Interest Loan (LG7, LG8) To borrow $1,550, you are offered an add on interest loan at 8.3 percent with 12 monthly payments. Compute the 12 equal payments. (Round your answer to 2 decimal places.)      Equal payments $       Compute the EAR of the loan. (Do not round intermediate calculations and round your answer to 2 decimal places.)      EAR %