Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000 down and financed the rest, with the agreement to pay nothing for the entire first year and then to pay $586.83 at the end of each month over years 2, 3, and 4 (first payment is in 13th month). a. What nominal interest rate is Aerotron paying on the loan? 8.4 % b. What effective interest rate are they paying? 8.1 % Round your answer to 4 decimal places for a and b. The tolerance is ± 0.0005. c. How much of the 14th month's payment is interest? How much is principal? payment interest = $ ,and principal - $ d. How much of the 18th month's payment is interest? How much is principal? payment interest = $ ,and principal - $ e. How much of the 22nd month's payment is interest? How much is principal? payment interest = $ ,and principal - $

Aerotron Electronics has just bought a used delivery truck for $15,000. The small business paid $1,000 down and financed the rest, with the agreement to pay nothing for the entire first year and then to pay $586.83 at the end of each month over years 2, 3, and 4 (first payment is in 13th month). a. What nominal interest rate is Aerotron paying on the loan? 8.4 % b. What effective interest rate are they paying? 8.1 % Round your answer to 4 decimal places for a and b. The tolerance is ± 0.0005. c. How much of the 14th month's payment is interest? How much is principal? payment interest = $ ,and principal - $ d. How much of the 18th month's payment is interest? How much is principal? payment interest = $ ,and principal - $ e. How much of the 22nd month's payment is interest? How much is principal? payment interest = $ ,and principal - $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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