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mount financed, the finance ch rge, and the monthly P loan. (Round your answers to the nearest cent.) Purchase Add-on Number of Interest Payments Down Amount Financed Finance (Cash) Price Monthly Payment Payment Charge $50,900 25% 13.2% 60

mount financed, the finance ch rge, and the monthly P loan. (Round your answers to the nearest cent.) Purchase Add-on Number of Interest Payments Down Amount Financed Finance (Cash) Price Monthly Payment Payment Charge $50,900 25% 13.2% 60

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 17P
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Calculate the amount financed, the finance charge, and the monthly payments (in $) for the add-on interest loan. (Round your answers to the nearest cent.) Purchase Down Add-on Number of Finance Monthly Payment Amount (Cash) Price Payment Financed Interest Payments Charge $50,900 25% 13.2% 60
Transcribed Image Text:Calculate the amount financed, the finance charge, and the monthly payments (in $) for the add-on interest loan. (Round your answers to the nearest cent.) Purchase Down Add-on Number of Finance Monthly Payment Amount (Cash) Price Payment Financed Interest Payments Charge $50,900 25% 13.2% 60
Expert Solution
Step 1 Introduction

To finance a loan one has to pay some down payment. To find the amount financed one needs to deduct the downpayment from the purchase price. 

Step 2 Calculation of Amount Financed

Calculation of the Amount Financed is as follows:

Finance homework question answer, step 2, image 1

Step 3 Calculation of Total interest to be paid

Calculation of Total interest to be paid is as follows:Interest=Principal×Annual interest×Term=$38,175×0.132×5years=$25,195.5

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