Chapter $7$

Financial Planning Exercise $8$

Calculating payments, interest, and APR on auto loan

After careful comparison shopping, Isabella Green decides to buy a new Toyota Camry. With some options added, the car has a price of $$16,000$ including plates and taxes. Because she can't afford to pay cash for the car, she will use some savings and her old car as a trade$-$in to put down $$9,500.$ She plans to finance the rest with a $$6,500,48-$month loan at a simple interest rate of $11$ percent.

a$.$ What will her monthly payments be$?$ Round the answer to the nearest cent. per month

b$.$ How much total interest will Isabella pay in the first year of the loan? Round the answer to the nearest cent.

c$.$ How much interest will Isabella pay over the full $(48-$month$)$ life of the loan? Round the answer to the nearest cent.

d$.$ What is the APR on this loan? Rqund the answer to $1$ decimal place. $\%$