Next Question Quiz: Chapter 5 Quiz Time Remaining: 01:28:59 Submit Quiz This Que

Question

Next Question Quiz: Chapter 5 Quiz Time Remaining: 01:28:59 Submit Quiz This Question: 1 pt 2 of 13(0 complete) Y This Quiz: 13 pts possibl have some extra cash is north and you are considering putting it to you have 36 months left on your loan. I time left to pay off your loan? (Note ard your car loan Your interest rate is 67%, your loan payments are S646 per month, and If you pay an additional $1,100 with your next regular $646 payment (due in one month), how much will it reduce the amount of Be careful not to round any intermediate steps less than 6 decimal places) The new time lefto pay off your loan will be months (Round to one decimal place) Thus, you reduce the amount of time remaining on the loan by approximatelymonths. (Round to one decimal place)

Explanation / Answer

In financial calculator:

First find the loan amount

N=36

I/Y=6.7/12

PMT=646

CPT PV=21014.88

Now, find the time required

PMT=646+1100=1746

I/Y=6.7/12

FV=0

PV=-21014.88

CPT N=12.49

Alternatively

In excel, use the formula

=NPER(6.7%/12,-646-1100,-PV(6.7%/12,36,646))=12.49

Hence time reduced is 23.5 or 24 months

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.