Kimberly Jensen of Storm Lake, Iowa, wants to buy some living room furniture for her new apartment. A local store offered credit at an APR of 16 percent, with a maximum term of four years. The furniture she wishes to purchase costs $4,800, with no down payment required. Using Table 7-2 or the Garman/Forgue companion website, make the following calculations:
(a) What is the amount of the monthly payment if she borrowed for four years?
(b) What are the total finance charges over that four year period?
(c) How would the payment change if Kimberly reduced the loan term to three years?
(d) What are the total finance charges over that three year period?
(e) How would the payment change if she could afford a down payment of $500 with four years of financing?
(f) What are the total finance charges over that four-year period given the $500 down payment?