Question

Homework: Unit 7 Lab Assignment Save HW Score: 0%, 0 of 40 pts Score: 0 of 4 pts 2 of 10 (0 complete) Question Help Problem 4.LO4.14 You are considering the purchase of a BMW MS. You will borrow the money from BMW Financial Services. The terms of the deal are outlined below: BMW MS RWD, 500hp, 0-100 in 4.7s MSRP $110,000 Term 48 months APR 8% Down Payment-So Monthly Payments $2,685.42 The amortized loan payments are a blend of interest and principal. What is the total amount of interest you would pay over the life of the loan? Assume that taxes are zero. What is the total amount of interest you would pay over the life of the loan? (Round to the nearest dollar)

Answer 1

1). Total Amount Paid = Monthly Payment * Total No. of Payments

= $2,685.42 * 48 = $128,900.16

Total Amount of Interest paid = Total Amount Paid - Loan Amount

= $128,900.16 - $110,000 = $18,900.16

2). Loan Amount = Retail Amount - Down Payment

= $39,620 - $4,589 = $35,031

Monthly Payment = [Loan Amount * r] / [1 - (1 + r)^-n]

= [$35,031 * (0.13/12)] / [1 - {1 + (0.13/12)}^-(5*12)]

= $379.5025 / 0.4761 = $797.06