Question

In: Finance

Sam purchased a 2020 PT Cruiser GT for $25,000. Sam paid a 5%down payment, and...

Sam purchased a 2020 PT Cruiser GT for $25,000. Sam paid a 5% down payment, and then obtained a 60-month installment loan with an APR of 8%. a. Determine the amount of the down payment. b. Determine Sam’s total finance charge.

a. Determine the amount of the down payment.

b. Determine Sam’s total finance charge.

Solutions

Expert Solution

- Price of PT Cruiser GT = $25,000

a). Down payment = 5%

Amount of Down payment = $25,000*5%

= $1250

- Loan amount = $25,000 - $1250

= $23,750

Calculating the Monthly Loan payment:-

Where, P = Loan amount = $23,750

r = Periodic Interest rate = 8%/12 = 0.66666%

n= no of periods = 60 months

Monthly payment = $481.56

Total Finance Charge = (No of monthly Payment*Monthly payment) - Loan amount

Total Finance Charge = (60*$481.56) - $23,750

Total Finance Charge = $5143.60

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Ross purchased a new commercial vehicle today for $25,000 with a down payment of $3,000. The...
Ross purchased a new commercial vehicle today for $25,000 with a down payment of $3,000. The amount was financed using a five-year loan with a 4 percent interest rate (compounded monthly). How much will Ross owe on his vehicle loan after making payments for three years?
The McDonald Group purchased a piece of property for $1.5 million. It paid a down payment...
The McDonald Group purchased a piece of property for $1.5 million. It paid a down payment of 20% in cash and financed the balance. The loan terms require monthly payments for 15 years at an annual percentage rate of 5% compounded monthly. 1. What is the amount of each mortgage payment? 2. What is the loan balance at the end of year 5? 3. What is the amount of interest that needs to be repaid during year 5?
The McDonald Group purchased a piece of property for $1.5 million. It paid a down payment...
The McDonald Group purchased a piece of property for $1.5 million. It paid a down payment of 20% in cash and financed the balance. The loan terms require monthly payments for 15 years at an annual percentage rate of 5% compounded monthly. -What is the amount of each mortgage payment? -What is the loan balance at the end of year 5? -What is the amount of principal that needs to repaid during year 5? -What is the amount of interest...
Visionary Products purchased a building for $1,000,000 with 20% cash down payment and the remainder paid...
Visionary Products purchased a building for $1,000,000 with 20% cash down payment and the remainder paid in installments with 3% interest. Using excel, prepare an amortization schedule for the mortgage. I guess its okay to assume 30 year.
You are ready to buy a house, and you have $25,000 for a down payment and...
You are ready to buy a house, and you have $25,000 for a down payment and closing costs. Closing costs are estimated to be 4% of the loan value. You have an annual salary of $48,000 (monthly income $4000) , and the bank is willing to allow your monthly mortgage payment to be equal to 25% of your monthly income. The interest rate on the loan is 7.2% per year with monthly compounding (.6% per month) for a 30-year fixed...
If you purchase a piece of land for $25,000, making a $1,000 down payment, what would...
If you purchase a piece of land for $25,000, making a $1,000 down payment, what would the appropriate entry be for this transaction? If you wish to make a correcting journal entry to the prior year, what account would you post to? What are the three categories represented on the balance sheet? What are the two methods of reporting accounting transactions? Please explain what NOI/Net Operating Income represents on the income statement. What is a subsidiary journal? When reconciling the...
You just purchased a car for $50,000. You paid $10,000 for the down payment and the rest is the loan. The car loan is for 36 months at an annual
You just purchased a car for $50,000. You paid $10,000 for the down payment and the rest is the loan. The car loan is for 36 months at an annual interest rate of 6%. The loan payments should be made at the end of each month.A. How much is the monthly payment on the loan? Total monthly payment is ________.B. How much of the monthly payment is the interest payment in month 17?The interest amount is ________.C. How much of...
Sam decided to buy a property worth $200,000. He decided to put 10% towards down payment,...
Sam decided to buy a property worth $200,000. He decided to put 10% towards down payment, for his loan for 30 years at the interest rate of 5%. Answer following questions and write name of the financial calculator used. a. Loan amount = b. Down payment= c. Monthly payment= d. Total of all the mortgage payments= e. Total of Interest Payment
A home is purchased for 395,000 with a 10% down payment and a 30 year amortized...
A home is purchased for 395,000 with a 10% down payment and a 30 year amortized mortgage charging 3.6% compounded monthly find: a) the amount borrowed, b) the size of the monthly mortgage payment and c) the total interest paid over 30 years?
Marie and Alex just paid $250,000 for a house. They made a down payment of $50,000...
Marie and Alex just paid $250,000 for a house. They made a down payment of $50,000 and assumed a 30-year $200,000 mortgage with a fixed annual interest rate of 5.50%. The house will serve as a residence for several years, but Marie and Alex also view it as an investment, as property values in the neighborhood are projected to increase at a rate of 5% per year in the near future. Property taxes on their home will be $4,236 the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT