To purchase a new truck a contractor needs to borrow $48,550.  The bank offers a 5-year loan at an interest rate of 4¼%. The car dealer offers a 6-year loan at an interest rate of 2%.

Q1 : If you borrow from the bank and you make only one payment at the end of the loan period repaying the principal and interest what is the total amount that must be paid back? 

Q2 : If you borrow from the bank and you make equal monthly payments for 5 years, what is the monthly payment to the bank?

Q3 : If you make monthly payments, what is the total amount that must be paid back to the bank? 

Q4: If you finance from the dealer and you make only one payment at the end of the loan period repaying the principal and interest what is the total amount that must be paid back? 

Q5 :If you finance from the dealer and you make equal monthly payments for 6 years, what is the monthly payment to the dealer?

Q6 :  If you make monthly payments, what is the total amount that must be paid back to the dealer? 

Answer rating: 100% (QA)

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