   Chapter 14, Problem 2AT ### 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

# You are one of the branch managers of the Insignia Bank. Today two loan applications were submitted to your office. Calculate the requested information for each loan. Amount Financed Interest Rate Term of Loan Number of $1,000s Financed Table Factor Monthly Payment Total Interest$98,500 5.25% 20 years ______ ______ _________ __________

To determine

To calculate: The number of $1,000s financed, table factor, monthly payment and total interest when amount financed is$98,500, interest rate is 5.25 % and term of loan is 20 years.

Explanation

Given Information:

Amount Financed is $98500 Interest Rate is 5.25 % Term of loan is 20 years Formula used: The formula for the number of$ 1000 is

Number of $1000s financed = Amount Financed1000 Use the table 14.1 to calculate the table factor. Locate the table factor on the intersection of the number of years column and the interest rate row. The formula for Monthly payment is Monthly Payment = Number of 1000s financed × Table Factor And Number of payments = Term of loan × 12 Total interest is given by, Total Interest = (Monthly payment × Number of payments) Amount Financed Calculation: Consider the given values, Amount Financed =$98,500Interest Rate = 5.25%Term of Loan = 20years

To calculate number of $1000 financed, apply the formula Number of$1000s financed = Amount Financed1000= 985001000= 98

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