After careful comparison shopping, Dustin Creamer decides to buy a new Toyota Camry. With some options added,

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After careful comparison shopping, Dustin Creamer decides to buy a new Toyota Camry. With some options added, the car has a price of $23,558—including plates and taxes. Because he can’t afford to pay cash for the car, he will use some savings and his old car as a trade-in to put down $8,500. He plans to finance the rest with a $20,000, 60-month loan at a simple interest rate of 4 percent.

a. What will his monthly payments be?

b. How much total interest will Dustin pay in the first year of the loan? (Use a monthly payment analysis procedure similar to the one in Exhibit 7.6.)

c. How much interest will Dustin pay over the full (60-month) life of the loan?

d. What is the APR on this loan?

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a Using the financial calculator set on End Mode and 12 payments y...View the full answer

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Related Book For book-img-for-question

Personal Financial Planning

ISBN: 978-1111971632

13th edition

Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley

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Question Posted: Feb 13, 2015 09:32 AM

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After careful comparison shopping, Dustin Creamer decides to buy a new Toyota Camry. With some options added,

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a Using the financial calculator set on End Mode and 12 payments y...View the full answer

Personal Financial Planning

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