Monthly loan payments are computed using a formula. Payment information isoften arranged in tables to make it easy for customers.Clonthiy Payment per $1,000 of LoanInterest Rate(APR)2-Year Loan3-Year Loan4-Year Loan5-Year Loan1%$42.10$28.21$21.26$17.092%$42.54$28.64$21.70$17.533%$42.98$29.08$22.13$17.974%$43.42$29.52$22.58$18.425%$43.87$29.97$23.03$18.876%$44.32$30.42$23.49$19.337%$44.77$30.88$23.95$19.80EXAMPLE 1Whu is the monthlu navment for a $4.000 2-vear loan with an APR of 4%? 6. Darnelle has a S10,000, 3-year loan with an APR of 5%. She uses the table onpage 159 to compute information on the loan.a. What is her monthly payment?b. What is the total of all her monthly payments?c. What is the finance charge?

The additional amount over the borrowed amount that a borrower pays to the lender is term as the…

6. Darnelle has a $10,000, 3-year loan with an APR of 5%. She uses the table on page 159 to compute information on the loan. a. What is her monthly payment? b. What is the total of all her monthly payments? c. What is the finance charge?

6. Darnelle has a $10,000, 3-year loan with an APR of 5%. She uses the table on page 159 to compute information on the loan. a. What is her monthly payment? b. What is the total of all her monthly payments? c. What is the finance charge?

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 5FPE

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

100%

Monthly loan payments are computed using a formula. Payment information is
often arranged in tables to make it easy for customers.
Clonthiy Payment per $1,000 of Loan
Interest Rate
(APR)
2-Year Loan
3-Year Loan
4-Year Loan
5-Year Loan
1%
$42.10
$28.21
$21.26
$17.09
2%
$42.54
$28.64
$21.70
$17.53
3%
$42.98
$29.08
$22.13
$17.97
4%
$43.42
$29.52
$22.58
$18.42
5%
$43.87
$29.97
$23.03
$18.87
6%
$44.32
$30.42
$23.49
$19.33
7%
$44.77
$30.88
$23.95
$19.80
EXAMPLE 1
Whu is the monthlu navment for a $4.000 2-vear loan with an APR of 4%?

6. Darnelle has a S10,000, 3-year loan with an APR of 5%. She uses the table on
page 159 to compute information on the loan.
a. What is her monthly payment?
b. What is the total of all her monthly payments?
c. What is the finance charge?

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