UTPurdedd66 3573 3)recedasCrSuppose that you decide to buy a car for $25,767, including taxes andlicense fees. You saved $8000 for a down payment and can get a 5-year loanat 6.57%. (a) Find the monthly payment for the loan. (b) Find the totalinterest for the loan. (Round to the nearest dollar. For example, $247)12.

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Asked Oct 26, 2019
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UT
Purded
d66 3
573 3)reced
as
Cr
Suppose that you decide to buy a car for $25,767, including taxes and
license fees. You saved $8000 for a down payment and can get a 5-year loan
at 6.57%. (a) Find the monthly payment for the loan. (b) Find the total
interest for the loan. (Round to the nearest dollar. For example, $247)
12.
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UT Purded d66 3 573 3)reced as Cr Suppose that you decide to buy a car for $25,767, including taxes and license fees. You saved $8000 for a down payment and can get a 5-year loan at 6.57%. (a) Find the monthly payment for the loan. (b) Find the total interest for the loan. (Round to the nearest dollar. For example, $247) 12.

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Expert Answer

Step 1

Not:No intermediate rounding is done, only the answer is rounded to nearest dollar.

a)The cost of buying a car is $25,767 of which $8000 is saved as the down-payment. Therefore, the loan amount is $17,767 (25767 – 8000). Interest rate for a period of 5 year is 6.57%.

To calculate the monthly payment on the loan of $17.767, present value annuity payment formula will be used.

PV xr
P =
1-1/(1+r)
where
PV=17767
r 6.57% +12 = 0.5475%
n 5x12 60
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PV xr P = 1-1/(1+r) where PV=17767 r 6.57% +12 = 0.5475% n 5x12 60

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Step 2

Putting the values in the above equation:

17767 x 0.005475
P =
60
[1-1/(1+0.005475)]
97.274325
[1-0.720648]
97.274325
0.279352
=S348.2146
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17767 x 0.005475 P = 60 [1-1/(1+0.005475)] 97.274325 [1-0.720648] 97.274325 0.279352 =S348.2146

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Step 3

Answer: Monthly payment of the loan is $...

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