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Russ T. Steele (a AMU engineering major) is thinking of buying a brand new sport utility vehicle for $26,000 today and putting $4000 down through the trade of his existing vehicle. The vehicle loan is for 5 years at an APR of 18% because he currently has a terrible credit rating. If interest is compounded monthly and his payments are monthly, the total interest that Mr. Steele will have paid on the loan if he makes only the monthly payments (no more, no less!), will be approximately equal to a total of: O a. $11,500 O b. $19,500 O c. $15,500 O d. $17,500

Russ T. Steele (a AMU engineering major) is thinking of buying a brand new sport utility vehicle for $26,000 today and putting $4000 down through the trade of his existing vehicle. The vehicle loan is for 5 years at an APR of 18% because he currently has a terrible credit rating. If interest is compounded monthly and his payments are monthly, the total interest that Mr. Steele will have paid on the loan if he makes only the monthly payments (no more, no less!), will be approximately equal to a total of: O a. $11,500 O b. $19,500 O c. $15,500 O d. $17,500

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 35P
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Russ T. Steele (a AMU engineering major) is thinking of buying a brand new sport utility vehicle for $26,000 today and putting $4000 down through the trade of his existing vehicle. The vehicle loan is for 5 years at an APR of 18% because he currently has a terrible credit rating. If interest is compounded monthly and his payments are monthly, the total interest that Mr. Steele will have paid on the loan if he makes only the monthly payments (no more, no less!), will be approximately equal to a total of: O a. $11,500 O b. $19,500 O c. $15,500 O d. $17,500
Transcribed Image Text:Russ T. Steele (a AMU engineering major) is thinking of buying a brand new sport utility vehicle for $26,000 today and putting $4000 down through the trade of his existing vehicle. The vehicle loan is for 5 years at an APR of 18% because he currently has a terrible credit rating. If interest is compounded monthly and his payments are monthly, the total interest that Mr. Steele will have paid on the loan if he makes only the monthly payments (no more, no less!), will be approximately equal to a total of: O a. $11,500 O b. $19,500 O c. $15,500 O d. $17,500
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