Chapter 7.3, Problem 54E

### Calculus: An Applied Approach (Min...

10th Edition
Ron Larson
ISBN: 9781305860919

Chapter
Section

### Calculus: An Applied Approach (Min...

10th Edition
Ron Larson
ISBN: 9781305860919
Textbook Problem
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# Monthly Payments You are taking out a car loan for $16,000, and you are given the options below. Find the monthly payment and the total amount of money you will pay for each loan. Which option would you choose? Explain your reasoning.(a) A fixed annual rate of 5%, over a term of 3 years.(b) A fixed annual rate of 3.5%, over a term of 4 years. (a) To determine To calculate: The monthly payment and the total amount of money pay for a fixed rate of change 5%, over a term a term of 3 years. Explanation Given information: The amount of car loan is$16,000

The fixed rate of change 5%, over a term a term of 3 years.

Formula used:

The monthly payment for mortgage P annual rate of r% over the time t.

M=(Pr12)1[1(1+r12)]12t

Total payment=The total monthly payment×Time

Calculation:

Consider the given information

The amount of car is $16,000 and the fixed rate of change 5%, over a term a term of 3 years. Substitute,$16,000 for P, 5% for r and 3 for t in monthly payment formula

M=(16,000(0

(b)

To determine

To calculate: The monthly payment and the total amount of money pay for a fixed rate of change 7%, over a term a term of 30 years.

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