Miguel Perez of Pamona, California, obtained a two-year installment loan for $1,600 to buy a television set eight months ago. The loan had a 6.9 percent APR and a finance charge of $118.64. His monthly payment is $71.61. Miguel has made eight monthly payments and now wants to pay off the remainder of the loan. The lender will use the rule of 78s method to calculate a prepayment penalty. How much will Miguel need to give the lender to pay off the loan? Do not round intermediate calculations.
Miguel Perez of Pamona, California, obtained a two-year installment loan for $1,600 to buy a television set eight months ago. The loan had a 6.9 percent APR and a finance charge of $118.64. His monthly payment is $71.61. Miguel has made eight monthly payments and now wants to pay off the remainder of the loan. The lender will use the rule of 78s method to calculate a prepayment penalty. How much will Miguel need to give the lender to pay off the loan? Do not round intermediate calculations.
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 19P
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Miguel Perez of Pamona, California, obtained a two-year installment loan for $1,600 to buy a television set eight months ago. The loan had a 6.9 percent APR and a finance charge of $118.64. His monthly payment is $71.61. Miguel has made eight monthly payments and now wants to pay off the remainder of the loan. The lender will use the rule of 78s method to calculate a prepayment penalty.
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How much will Miguel need to give the lender to pay off the loan? Do not round intermediate calculations.
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