You wish to buy a $10,000 dining room set. The furniture store offers you a 3-year loan with an 11 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the consequences of such a decision be?
Answer to relevant QuestionsJoey realizes that he has charged too much on his credit card and has racked up $5,000 in debt. If he can pay $150 each month and the card charges 17 percent APR (compounded monthly), how long will it take him to pay off ...To borrow $700, you are offered an add-on interest loan at 9 percent with 12 monthly payments. First, compute the 12 equal payments and then compute the EAR of the loan:Rachel purchased a $15,000 car three years ago using an 8 percent, 4-year loan. She has decided that she would sell the car now, if she could get a price that would pay off the balance of her loan. What is the minimum price ...If the present value of an ordinary, 6-year annuity is $8,500 and interest rates are 9.5 percent, what’s the present value of the same annuity due? Consider Gavin, a new freshman who has just received a Stafford student loan and started college. He plans to obtain the maximum loan from Stafford at the beginning of each year. Although Gavin does not have to make any ...
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