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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

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

At a recent boat show, Nautica Bank was offering boat loans for up to 5 years with an APR of 13.5%. On new boats, a 20% down payment was required. Scott Vaughn wanted to finance a $55,000 boat for 5 years.

a. What would be the finance charge on the loan?

b. What would be the monthly payment?

(a)

To determine

To calculate: The finance charge if Nautica Bank is offering loan for 5 years with APR of 13.5%. On new boats, 20% down payment was required. Scott Vaughn wanted to finance $55,000 for 5 years.

Explanation

Given Information:

Nautica Bank is offering loan for 5 years with APR of 13.5%. On new boats, 20% down payment was required. Scott Vaughn wanted to finance $55,000 for 5 years.

Formula used:

Amount financed is computed by subtracting the down payment from the purchase price,

Amount financed=Purchase price(100%Down payment percent)

The formula for the interest finance of add-on charge is computed using I=PRT where P is principal or purchase price, R is rate and T is time.

Finance charge=P×R×T

Calculation:

Consider that purchase price is $55,000, rate is 13.5%, time is 5 years, down payment percent is 20% and number of months of loan 60(5 years)

(b)

To determine

To calculate: The monthly payments if Nautica Bank offering loan for 5 years with APR of 13.5%. On new boats, 20% down payment was required. Scott Vaughn wanted to finance a $55,000 for 5 years, amount financed is 44,000, finance charge is $29,700 and number of months of loan 60(5 years).

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Chapter 13 Solutions

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Sect-13.I P-8RESect-13.I P-9RESect-13.I P-10RESect-13.I P-11RESect-13.I P-12RESect-13.I P-13RESect-13.I P-14RESect-13.I P-15RESect-13.I P-16RESect-13.I P-17RESect-13.I P-18RESect-13.II P-4TIESect-13.II P-5TIESect-13.II P-6TIESect-13.II P-7TIESect-13.II P-8TIESect-13.II P-9TIESect-13.II P-1RESect-13.II P-2RESect-13.II P-3RESect-13.II P-4RESect-13.II P-5RESect-13.II P-6RESect-13.II P-7RESect-13.II P-8RESect-13.II P-9RESect-13.II P-10RESect-13.II P-11RESect-13.II P-12RESect-13.II P-13RESect-13.II P-14RESect-13.II P-15RESect-13.II P-16RESect-13.II P-17RESect-13.II P-18RESect-13.II P-19RESect-13.II P-20RESect-13.II P-21RESect-13.II P-22RESect-13.II P-23RESect-13.II P-24RESect-13.II P-25RESect-13.II P-26RESect-13.II P-27RESect-13.II P-28RESect-13.II P-29RESect-13.II P-30RESect-13.II P-31RESect-13.II P-32RESect-13.II P-33RESect-13.II P-34RESect-13.II P-35RESect-13.II P-36RESect-13.II P-37RESect-13.II P-38RESect-13.II P-39RESect-13.II P-40RESect-13.II P-41RESect-13.II P-42RESect-13.II P-43RESect-13.II P-44RESect-13.II P-45RESect-13.II P-46RESect-13.II P-47RESect-13.II P-48RESect-13.II P-49RESect-13.II P-50RESect-13.II P-51RESect-13.II P-52RESect-13.II P-53RESect-13.II P-54RESect-13.II P-55RECh-13 P-1CRCh-13 P-2CRCh-13 P-3CRCh-13 P-4CRCh-13 P-5CRCh-13 P-6CRCh-13 P-7CRCh-13 P-8CRCh-13 P-9CRCh-13 P-10CRCh-13 P-11CRCh-13 P-12CRCh-13 P-13CRCh-13 P-14CRCh-13 P-1ATCh-13 P-2ATCh-13 P-3ATCh-13 P-4ATCh-13 P-5ATCh-13 P-6ATCh-13 P-7ATCh-13 P-8ATCh-13 P-9ATCh-13 P-10ATCh-13 P-11ATCh-13 P-12ATCh-13 P-13ATCh-13 P-14ATCh-13 P-15AT

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