Mary Smith took a car loan of $20,000 to make 60 equal monthly payments. The interest compounds monthly. (a) Calculate the monthly payment for Mary, if the nominal interest is 9% per year. (b) (How much interest would Mary pay for taking the loan? (c) Immediately after making the 20th payment, if she wants to pay off the car loan, how much does she need to pay?
Mary Smith took a car loan of $20,000 to make 60 equal monthly payments. The interest compounds monthly. (a) Calculate the monthly payment for Mary, if the nominal interest is 9% per year. (b) (How much interest would Mary pay for taking the loan? (c) Immediately after making the 20th payment, if she wants to pay off the car loan, how much does she need to pay?
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
Section: Chapter Questions
Problem 9.19E
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1. Mary Smith took a car loan of $20,000 to make 60 equal monthly payments. The interest compounds monthly.
(a) Calculate the monthly payment for Mary, if the nominal interest is 9% per year.
(b) (How much interest would Mary pay for taking the loan?
(c) Immediately after making the 20th payment, if she wants to pay off the car loan, how much does she need to pay?
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