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Lamar borrowed money from his credit union to buy a motorcycle. He took out a personal, amortized loan for $13,500, at an interest rate of 4.75%, with monthly payments for a term of 6 years. For each part, do not round any intermediate computations and round your final answers to the nearest cent. If necessary, refer to the list of financial formulas. (a) Find Lamar's monthly payment. $0 (b) If Lamar pays the monthly payment each month for the full term, find his total amount to repay the loan. (c) If Lamar pays the monthly payment each month for the full term, find the total amount of interest he will pay. CO EXPLANATION (a) Finding the monthly payment The monthly payment to pay off an amortized loan is given by this formula. Monthly Payment Formula P 12 M= Here M is the monthly payment, P is the principal, is the interest - 12t rate, and f is the number of years that payments are made. 1- (1 + 12 To find Lamar's monthly payment, we use these values. P = $13,500 7 =4.75% = 0.0475 t = 6 years By substituting these values into the formula and using the ALEKS calculator, we get this. 13,500 ( 9.0475 M= 12 - 12(6) = 215.854... 1 - (1+ 0.0475 12 Rounding to the nearest cent, we find that Lamar's monthly payment is $215.85. (b) Finding the total amount to repay the loan There are 12 payments per year for a term of 6 years. So, there are 12 X 6 = 72 monthly payments in all. If Lamar pays the monthly payment each month, then we multiply to find the total amount to repay the loan. 72 x 215.85 = $15,541.20 (c) Finding the total amount of interest that will be paid To find the total amount of interest paid, we take the total amount to repay the loan and subtract the amount borrowed (principal). 15,541.20 - 13,500 = $2041.20 ANSWER (=) Find Lamar's monthly payment. $215.85 (b) If Lamar pays the monthly payment each month for the full term, find his total amount to repay the loan. $15,541.20 (c) If Lamar pays the monthly payment each month for the full term, find the total amount of interest he will pay. $2041.20