Stacey purchased a car for $58,300; she paid 5% of the cost as a down payment and finance he balance amount at 3.9% compounded quarterly for 5 years. ) What is the size of payment made at the end of every three months to settle the loan? $

Stacey purchased a car for $58,300; she paid 5% of the cost as a down payment and finance he balance amount at 3.9% compounded quarterly for 5 years. ) What is the size of payment made at the end of every three months to settle the loan? $

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 19PROB

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Stacey purchased a car for $58,300; she paid 5% of the cost as a down payment and financed
the balance amount at 3.9% compounded quarterly for 5 years.
a) What is the size of payment made at the end of every three months to settle the loan? $

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