On September 1, 2013, Susan Chao bought a motorcycle for
$21,000. She paid $1,100 down and financed the balance with a
five-year loan at an APR of 6.3 percent, compounded monthly. She
started the monthly payments exactly one month after the purchase
(i.e., October 1, 2013). Two years later, at the end of October
2015, Susan got a new job and decided to pay off the loan. If the
bank charges her a 2 percent prepayment penalty based on the...