   Chapter 12.III, Problem 12RE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Solve the following exercises by using tables.Jennifer Kaufman bought a used Toyota Prius for $15,500. She made a$2,500 down payment and is financing the balance at Imperial Bank over a 3-year period at 12% interest. As her banker, calculate what equal monthly payments will be required by Jennifer to amortize the car loan.

To determine

To calculate: The amount of monthly loan payments required to pay to the bank for the loan by Jennifer Kaufman for the purchase of Toyota Prius costing $15,500 where payment frequency is 1 month, time duration is 3 years, nominal rate of return is 12% and down payment made is$2,500.

Explanation

Given Information:

Payment frequency is 1 month, time duration is 1 years, nominal rate of return is 12% and present value amount is $15,500, down payment made is$2,500.

Formula used:

The formula to compute the loan payment is,

Amortization payment=Original amount of obligationPresent value table factor

Calculation:

Consider that payment frequency is 1 month, time duration is 3 years, nominal rate of return is 12% and present value amount is $15,500, down payment made is$2,500.

The rate period is 1%(12%÷12 period per year).

The number of periods is 36(3 years×12 period per year)

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