Question

Investigate the effect of the term on simple interest amortized auto loans by finding the monthly payment and the total interest for a loan of $17,000 at

9

7

8

%

interest if the term is the following. (Round your answers to the nearest cent.)

(a) three years

payment	$
total interest	$

(b) four years

payment	$
total interest	$

(c) five years

payment	$
total interest	$

Step by step

Answer 1

SOLUTION:

From given data,

Investigate the effect of the term on simple interest amortized auto loans by finding the monthly payment and the total interest for a loan of $17,000 at 9 7/8 % interest if the term is the following.

Where,

Principle = P = $17,000

Interest = 9 7/8 % = 79/8

(a) three years

T = 3

Simple interest (S.I) = PTR / 100

Simple interest (S.I) = (17000)(3)(79/8) / 100

Simple interest (S.I) = 5036.25

Three years payment = P+ SI = 17000+ 5036.25 = 22036.25

payment = $ 22036.25

total interest = $ 5036.25

(b) four years

T = 4

Simple interest (S.I) = PTR / 100

Simple interest (S.I) = (17000)(4)(79/8) / 100

Simple interest (S.I) = 6715

Three years payment = P+ SI = 17000+ 6715 = 23715

payment = $ 23715

total interest = $ 6715

(c) five years

T = 5

Simple interest (S.I) = PTR / 100

Simple interest (S.I) = (17000)(5)(79/8) / 100

Simple interest (S.I) = 8393.75

Three years payment = P+ SI = 17000+ 8393.75 = 25393.75

payment = $ 25393.75

total interest = $ 8393.75