Shirley Stewart is planning to buy a Toyota hybrid for $18,909 with $2,900 down

Question

Shirley Stewart is planning to buy a Toyota hybrid for $18,909 with $2,900 down and plans to finance the car. Citizens’ Financial Bank quoted a finance charge at 8% for 48 months; Charter One Bank quoted her a finance charge at 7.5% for 60 months.

What would be her monthly payment to Citizens’ Financial Bank? (Do not round intermediate calculations. Round your answer to the nearest cent.)

What would be her monthly payment to Charter One Bank? (Do not round intermediate calculations. Round your answer to the nearest cent.)

How much more would her monthly payment be on the 48-month loan? (Do not round intermediate calculations. Round your answer to the nearest cent.)

Shirley Stewart is planning to buy a Toyota hybrid for $18,909 with $2,900 down and plans to finance the car. Citizens’ Financial Bank quoted a finance charge at 8% for 48 months; Charter One Bank quoted her a finance charge at 7.5% for 60 months.

Explanation / Answer

Amount of loan = 18,909 - 2,900 = $16,009

a. Monthly Interest = 0.08/12 = 0.0067
EMI = [P*R*(1+r)n] / [(1+r)n - 1] = [16,009*0.0067*(1+0.0067)48] / [(1+0.0067)48 - 1] = $325

b. Monthly Interest = 0.075/12 = 0.00625
EMI = [P*R*(1+r)n] / [(1+r)n - 1] = [16,009*0.00625*(1+0.00625)60] / [(1+0.00625)60 - 1] = $321

c. More in monthly payment = 325 - 321 = $4

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

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