Chapter 6.5, Problem 29E

Mathematical Applications for the ...

12th Edition
Ronald J. Harshbarger + 1 other
ISBN: 9781337625340

Chapter
Section

Mathematical Applications for the ...

12th Edition
Ronald J. Harshbarger + 1 other
ISBN: 9781337625340
Textbook Problem

A recent college graduate buys a new car by borrowing $18,000 at 8.4% compounded monthly for 5 years. She decides to pay$384 instead of the monthly payment required by the loan.(a) What is the monthly payment required by the loan, and how much extra did she pay per month?(b) How many $384 payments will she make to pay off the loan?(c) How much will she save by paying$384 per month rather than the required payment?

(a)

To determine

To calculate: The monthly payment on the loan and the extra amount paid per month if the amount $18,000 is borrowed by a college graduate at 8.4% compounded monthly for 5 years for buying a new car Explanation Given Information: The amount$18,000 is borrowed by a college graduate at 8.4% compounded monthly for 5 years for buying a new car. Instead of monthly payments required she pays $384. Formula used: If a debt of$An, with interest at a rate of i per period, is amortized by n equal periodic payments, the size of each payment is:

R=An[i1(1+i)n]

Calculations:

Consider the provided information:

The amount $18,000 is borrowed by a college graduate at 8.4% compounded monthly for 5 years for buying a new car. Instead of monthly payments required she pays$384.

Since, according to the given information,

The amount $18,000 is borrowed by a college graduate. Therefore, An=18,000 They refinance at 8.4% compounded monthly for 5 years. Therefore, n=5×12=60 And, i=8.4100×112=0.007 The size of each payment is: R=An[i1(1+i)n] Substitute 18,000 for An, 0.007 for i and 60 for n in R=An[i1(1+i)n] (b) To determine To calculate: The number of payments of$384 she would make to pay off the loan if the amount $18,000 is borrowed by a college graduate at 8.4% compounded monthly for 5 years for buying a new car. (c) To determine To calculate: The amount saved by her by paying$384 per month instead of the required payment if the amount \$18,000 is borrowed by a college graduate at 8.4% compounded monthly for 5 years for buying a new car.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

In Exercises 516, evaluate the given quantity. log1,000

Finite Mathematics and Applied Calculus (MindTap Course List)

Show that |sinxcosx|2 for all x

Calculus (MindTap Course List)

Use the guidelines of Section 4.5 to sketch the curve. y = x2/3(x 3)2

Single Variable Calculus: Early Transcendentals, Volume I

If n(A)=12, n(B)=12, n(AB)=5, n(AC)=5, n(BC)=4, n(ABC)=2 and n(ABC)=25, find n(C).

Finite Mathematics for the Managerial, Life, and Social Sciences

Using a binomial series, the Maclaurin series for is:

Study Guide for Stewart's Single Variable Calculus: Early Transcendentals, 8th

One of the vector forms of Green’s Theorem says that a) b) c) d)

Study Guide for Stewart's Multivariable Calculus, 8th