Word Problem 1411 LU 141 1 2 3 From this partial advertiseme

Word Problem 14-11 [LU 14-1 (1, 2, 3)]

Solution

a)

amout financed = car price - down payment = 4100 - 50 = $4,050

b)

Cumulative amount of monthly payments = 95.10 * 60 = 5,706

amount of finance charge = 5706 - 4050 = $1,656

c)

Deferred payment price = 50 + 5706 = $5,756

d)

Let X be the APR

=>

4050 = 95.10 * [1-(1+APR/12)^-60]/APR/12

=>

APR = 14.41%

e)

let X be the monthly paymnt

X * [1-(1+14.41%/12)^-60]/14.41%/12 = 4050

=>

X = 95.10

hence montly payment is $95.10 .......ans