Question: Recommendation: Read Sec 10.4 in the eText especially Examples 1 & 2 pages 593-596. Problem: Jeffery wants to modernize his kitchen. The cash price cost

Recommendation: Read Sec 10.4 in the eText especially Examples 1 & 2 pages 593-596. Problem: Jeffery wants to modernize his kitchen. The cash price cost is $5500. He saved $2100 for a down payment and will finance the rest. He applies for a 48-month loan at 5.5% APR. Find the monthly payment finance charge and total installment price using BOTH METHODS Finance Charge Table Method Installment Payment Formula Method 1. Use the table to find the finance charge rate. 1. Identify: Principal, P- Interest rater, as a decimal = Number of payments per year, na 2. Determine the number (6) of hundreds of Time in years, t= dollars financed. Find the total finance charge 2. Use the formula to find the monthly =ratex # of hundreds of dollars financed. payment. Write the formula with values and then use calculator 3. Find the monthly payment = (finance charge principal) - (# of months) 3. Find the finance charge = (monthly payment x payments)-principal 4. Find the total installment price = principal-finance charge+down payment 4. Find the total installment price = (monthly payment x #payments)+down pay 5. If you are asked to find only the finance charge, which method would you use? Why? Table 10.4 Monthly Principal and interest Payment per $1000 Or Mortgage Number of Years 30 Rate % 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 10 $9.65607 9.88859 10.12451 10.36384 10.60655 10.85263 11.10205 11.35480 11.61085 11.87018 12.13276 12.39857 12.66758 12.93976 13.21507 13.49350 13.77500 15 $6.90582 7.14883 7.39688 7.64993 7.90794 8.17083 8.43857 8.71107 8.98828 9.27012 9.55652 9.84740 10.14267 10.44225 10.74605 11.05399 11.36597 20 $5.54598 5.79960 6.05980 6.32649 6.59956 6.87887 7.16431 7.45573 7.75299 8.05593 8.36440 8.67823 8.99726 9.32131 9.65022 9.98380 10.32188 25 $4.74211 5.00624 5.27837 5.55832 5.84590 6.14087 6.44301 6.75207 7.06779 7.38991 7.71816 8.05227 8.39196 8.73697 9.08701 9.44182 9.80113 $4.21604 4.49045 4.77415 5.06685 5.36822 5.67789 5.99551 6.32068 6.65302 6.99215 7.33765 7.68913 8.04623 8.40854 8.77572 9.14739 9.52323 Recommendation: Read Sec 10.4 in the eText especially Examples 1 & 2 pages 593-596. Problem: Jeffery wants to modernize his kitchen. The cash price cost is $5500. He saved $2100 for a down payment and will finance the rest. He applies for a 48-month loan at 5.5% APR. Find the monthly payment finance charge and total installment price using BOTH METHODS Finance Charge Table Method Installment Payment Formula Method 1. Use the table to find the finance charge rate. 1. Identify: Principal, P- Interest rater, as a decimal = Number of payments per year, na 2. Determine the number (6) of hundreds of Time in years, t= dollars financed. Find the total finance charge 2. Use the formula to find the monthly =ratex # of hundreds of dollars financed. payment. Write the formula with values and then use calculator 3. Find the monthly payment = (finance charge principal) - (# of months) 3. Find the finance charge = (monthly payment x payments)-principal 4. Find the total installment price = principal-finance charge+down payment 4. Find the total installment price = (monthly payment x #payments)+down pay 5. If you are asked to find only the finance charge, which method would you use? Why? Table 10.4 Monthly Principal and interest Payment per $1000 Or Mortgage Number of Years 30 Rate % 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 10 $9.65607 9.88859 10.12451 10.36384 10.60655 10.85263 11.10205 11.35480 11.61085 11.87018 12.13276 12.39857 12.66758 12.93976 13.21507 13.49350 13.77500 15 $6.90582 7.14883 7.39688 7.64993 7.90794 8.17083 8.43857 8.71107 8.98828 9.27012 9.55652 9.84740 10.14267 10.44225 10.74605 11.05399 11.36597 20 $5.54598 5.79960 6.05980 6.32649 6.59956 6.87887 7.16431 7.45573 7.75299 8.05593 8.36440 8.67823 8.99726 9.32131 9.65022 9.98380 10.32188 25 $4.74211 5.00624 5.27837 5.55832 5.84590 6.14087 6.44301 6.75207 7.06779 7.38991 7.71816 8.05227 8.39196 8.73697 9.08701 9.44182 9.80113 $4.21604 4.49045 4.77415 5.06685 5.36822 5.67789 5.99551 6.32068 6.65302 6.99215 7.33765 7.68913 8.04623 8.40854 8.77572 9.14739 9.52323

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