# Ray Flagg took out a 60-month fixed installment loan of \$12,000 to open a new pet store. He paid no money down andbegan making monthly payments of \$232. Ray's business does better than expected and instead of making his 36thpayment, Ray wishes to repay his loan in full. Complete parts a) through c).6.2Click the icon to view the table of interest rates.a) Determine the APR of the installment loanAPR=b) How much interest will Ray save by paying off the loan early? (Use the actuarial method)(Round to the nearest cent.)Interest saved \$c) What is the total amount due to pay off the loan?The total amount due\$(Round to the nearest cent.)2: table of interest ratesAnnual Percemntage Rate7.0%6.0%5.5%6.5%4.5%5.0%3.5%4.0%3.0%Number ofPayments(Finance charge per \$100 of amount financed)7.456.915.836.374.755.294.223.69243.159.308.617.267.945.255.926.594.58303.9211.1610.349.527.097.908.716.294.695.493613.8314.9411.6312.739.4610.547.318.386.244818.8114.6116.0017.4011.8613.237.8110.509.1560

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Step 1

a)

The amount for monthly payment is \$232. So, the total amount payable over the whole loan term would be (\$232 × 60) = \$13,920.

The additional amount payable over the actual loan amount would be \$13,920 - \$12,000 = \$1,920.

Step 2

Individual is ready to pay \$1,920 as charges for \$12,000 loan. Thus, the amount that individual ready to pay as charges per \$100 is calculated below:

Step 3

From the table of interest rates, it can be concluded that when number of payme...

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