Homework Help is Here – Start Your Trial Now!
Business
Finance
are the loan department supervisor ban Being paid task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff dollars to the nearest cent.) Finance Number of Monthly Payments Made Amount Rebate Loan Financed Payments Payment Charge Rebate Payoff Fraction $4,700 36 $165.33 33

are the loan department supervisor ban Being paid task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff dollars to the nearest cent.) Finance Number of Monthly Payments Made Amount Rebate Loan Financed Payments Payment Charge Rebate Payoff Fraction $4,700 36 $165.33 33

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
See similar textbooks
icon
Related questions
Question
You are the loan department supervisor for a bank. This installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff for the loan (in $). (Round dollars to the nearest cent.) Finance Amount Number of Monthly Payment Payments Made Rebate Loan Charge Rebate Financed Payments Fraction Payoff $4,700 36 $165.33 33
Transcribed Image Text:You are the loan department supervisor for a bank. This installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff for the loan (in $). (Round dollars to the nearest cent.) Finance Amount Number of Monthly Payment Payments Made Rebate Loan Charge Rebate Financed Payments Fraction Payoff $4,700 36 $165.33 33
Expert Solution
Step 1

Given information :

Amount financed = $4,700

Number of payments = 36

Monthly payment = $165.33

Payments made = 33

 

 

Step 2

The rebate fraction can be calculated as follows :

= Sum of the digits of the number of payments remaining at the laon payoff timeSum of the digits of the total number of payments of the loanCalculating numerator :Number of payments remaining =36 - 33 = 3Sum of the digits = 3 ( 3 +1)2 = 6Calculating denominator :Sum of the digits = 36 36 +12 = 666Thus,Rebate fraction = 6666 =0.009

 

Step 3

The finance charge rebate can be calculated as follows :

Finance charge rebate = Rebate fraction × Total finance charge Where, Total finance charge = Monthly payment × Number of payments - Amount financedTotal finance charge = $165.33 × 36 - $4700                                       = $1251.88Therefore, Finance charge rebate = 6666 × $1251.88                                             = $11.2782

trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps

Blurred answer
Knowledge Booster
Trade Credit
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS