10.4 Installment Buying 627 22. A New Air Conditioner Juan paid $7000 for a new central air-conditioning unit for his house. He paid 20% as a down payment and financed the balance with a 36-month fixed installment loan with an APR of 5%. a) Determine Juan’s finance charge. $442.13 b) Determine Juan’s monthly payment. $167.84 23. Financing a New Roof Jaime needs a new roof on her house. The cash cost is $7500. She decides to finance the project by paying 20% down, with the balance paid in 36 monthly payments of $189.40. a) What finance charge will Jaime pay? $818.40 b) What is the APR to the nearest half percent? 8.5% 24. Financing a Computer Ilga purchased a new computer on a monthly purchase plan. The computer sold for $1495. Ilga paid 5% down and $64 a month for 24 months. a) What finance charge did Ilga pay? $115.75 b) What is the APR to the nearest half percent? 7.5% 25. Boat Loan Tarik is purchasing a new boat that sells for $60,714, including taxes and fees. He receives $21,500 as a trade-in on his old boat and uses the money as a down payment. Tarik finances the balance and has monthly payments of $767.29 for 60 months. a) What finance charge does Tarik pay? $6823.40 b) What is the APR to the nearest half percent? 6.5% 26. Financing Furniture The Chans want to buy furniture that has a cash price of $3450. On the installment plan, they must pay 25% of the cash price as a down payment and make six monthly payments of $437. a) What finance charge will the Chans pay? $34.50 b) What is the APR to the nearest half percent? 4.5% 27. Early Repayment of a Loan Ray took out a 60-month fixed installment loan of $12,000 to open a new pet store. He paid no money down and began making monthly payments of $232. Ray’s business does better than expected and instead of making his 24th payment, Ray wishes to repay his loan in full. a) Determine the APR of the installment loan. 6.0% b) How much interest will Ray save by paying off his loan early? $725.93 c) What is the total amount due to pay off the loan? $7858.07 28. Early Repayment of a Loan Jeslie Ann has a 48-month installment loan with a fixed monthly payment of $83.81. The amount she borrowed was $3500. Instead of making her 18th payment, Jeslie Ann is paying the remaining balance on the loan. a) Determine the APR of the installment loan. 7.0% b) How much interest will Jeslie Ann save by paying off the loan early? $213.84 c) What is the total amount due to pay off the loan? $2384.27 29. Early Repayment of a Loan Nina buys a new sport utility vehicle for $32,000. She trades in her old truck and receives $10,000, which she uses as a down payment. She finances the balance at 8% APR over 36 months. Before making her 24th payment, she decides to pay off the loan. a) Use Table 10.2 to determine the total interest Nina would pay if all 36 payments were made. $2818.40 b) What were Nina’s monthly payments? $689.40 c) How much interest will Nina save by paying off the loan early? $347.61 d) What is the total amount due to pay off the loan? $8614.59 30. Early Repayment of a Loan Jeff buys a new motorcycle for $12,000. He receives $4500 as a trade-in on his old motorcycle and uses the money as a down payment. Jeff finances the balance at 6.5% APR over 24 months. Before making his 12th payment, he decides to pay off the loan. a) Use Table 10.2 to determine the total interest Jeff would pay if all 24 payments were made. $518.33 b) What were Jeff’s monthly payments? $334.10 c) How much money will Jeff save by paying off the loan early? $137.66 d) What is the total amount due to pay off the loan? $4205.64 31. Credit Card Minimum Monthly Payment Shiing’s credit card company determines his minimum monthly payment by adding all new interest to 1% of the outstanding principal. The credit card company charges an interest rate of 0.04247% per day. On March 17, Shiing uses his credit card to purchase airline tickets for his family for $3000. He makes no other purchases during March. a) Assuming Shiing had no new interest, determine Shiing’s minimum payment due on April 1, his billing date. $30.00 b) On April 1, instead of making the minimum payment, Shiing makes a payment of $500. Assuming there are no additional charges or cash advances, determine Shiing’s minimum payment due on May 1. $56.85, which rounds up to $57 Jacob Lund/Shutterstock
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