Sammy and Ruby Loveapet wish to purchase a new car. The car will cost $48,000. Their lender will provide a loan at 11 percent compounded annually, and the loan will be paid off in three annual end-of-year payments over three years. The Loveapet's will put a downpayment of $5,000 on the auto and wish to know the following: a. How much are their annual payments? b. How much will be paid to the lender for interest each year? c. What will their loan balance be at the end of each year?

Question

Ansley Weaver

Business

17 August, 16:44

Sammy and Ruby Loveapet wish to purchase a new car. The car will cost $48,000. Their lender will provide a loan at 11 percent compounded annually, and the loan will be paid off in three annual end-of-year payments over three years. The Loveapet's will put a downpayment of $5,000 on the auto and wish to know the following: a. How much are their annual payments? b. How much will be paid to the lender for interest each year? c. What will their loan balance be at the end of each year?

+1

Answers (1)

Know the Answer?

Davion Velez · Answer 1

Car Amount 48000

Down payment 5000

Amount required for the Loan 43000

Amortization Schedule

Year Amount interst Instalment Total Payment Closin Loan

1 43000 4730 14333.33 19063.33 28666.67

2 28666.67 3153.33 14333.33 17486.67 14333.33

3 14333.33 1576.67 14333.33 15910 0