ZuoTi.Pro
Question

On September 1, 2013, Susan Chao bought a motorcycle for $23,000. She paid $1,200 down and...

On September 1, 2013, Susan Chao bought a motorcycle for $23,000. She paid $1,200 down and financed the balance with a five-year loan at an APR of 6.5 percent, compounded monthly. She started the monthly payments exactly one month after the purchase (i.e., October 1, 2013). Two years later, at the end of October 2015, Susan got a new job and decided to pay off the loan.

If the bank charges her a 2 percent prepayment penalty based on the loan balance. how much must she pay the bank on Nov. 1st 2015?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

The loan amount is $23,000 - $1,200 = $21,800.

Monthly rate is (6.5% / 12) = 0.54167%.

The monthly payment is calculated below:

(1-(1+i) - Loan amount = Monthly payment x

21,800 = Monthly payment x 1-(1+0.0054167)-60 0.0054167

21,800 = Monthly payment x 51.11

426.54 = Monthly payment

Loan outstanding on Nov 1st 2015 is calculated below:

Loan amount = 426.54 x 1- (1 + 0.0054167)-35 1-1.0054167-1

Loan amount = 13,639.25

The amount payable on Nov 1st 2015 is $13,639.25 × 1.02 = $13,912.04.

0 0
Add a comment
Know the answer?
Add Answer to:
On September 1, 2013, Susan Chao bought a motorcycle for $23,000. She paid $1,200 down and...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • On September 1, 2013, Susan Chao bought a motorcycle for $36,000. She paid $1,000 down and...

    On September 1, 2013, Susan Chao bought a motorcycle for $36,000. She paid $1,000 down and financed the balance with a five-year loan at an APR of 7.8 percent, compounded monthly. She started the monthly payments exactly one month after the purchase (i.e., October 1, 2013). Two years later, at the end of October 2015, Susan got a new job and decided to pay off the loan.    If the bank charges her a 1 percent prepayment penalty based on...

  • On September 1, 2013, Susan Chao bought a motorcycle for $36,000. She paid $1,000 down and...

    On September 1, 2013, Susan Chao bought a motorcycle for $36,000. She paid $1,000 down and financed the balance with a five-year loan at an APR of 7.8 percent, compounded monthly. She started the monthly payments exactly one month after the purchase (i.e., October 1, 2013). Two years later, at the end of October 2015, Susan got a new job and decided to pay off the loan.    If the bank charges her a 1 percent prepayment penalty based on...

  • On September 1, 2013, Susan Chao bought a motorcycle for $24,000. She paid $1,100 down and...

    On September 1, 2013, Susan Chao bought a motorcycle for $24,000. She paid $1,100 down and financed the balance with a five-year loan at an APR of 6.6 percent, compounded monthly. She started the monthly payments exactly one month after the purchase (i.e., October 1, 2013). Two years later, at the end of October 2015, Susan got a new job and decided to pay off the loan.    If the bank charges her a 1 percent prepayment penalty based on...

  • On September 1, 2013, Susan Chao bought a motorcycle for $22,000. She paid $1,000 down and...

    On September 1, 2013, Susan Chao bought a motorcycle for $22,000. She paid $1,000 down and financed the balance with a five-year loan at an APR of 6.4 percent, compounded monthly. She started the monthly payments exactly one month after the purchase (i.e., October 1, 2013). Two years later, at the end of October 2015, Susan got a new job and decided to pay off the loan.    If the bank charges her a 1 percent prepayment penalty based on...

  • On September 1, 2018, Susan Chao bought a motorcycle for $34,000. She paid $1,100 down and...

    On September 1, 2018, Susan Chao bought a motorcycle for $34,000. She paid $1,100 down and financed the balance with a five-year loan at an annual percentage rate of 7.6 percent compounded monthly. She started the monthly payments exactly one month after the purchase (i.e., October 1, 2018). Two years later, at the end of October 2020, Susan got a new job and decided to pay off the loan.    If the bank charges her a 1 percent prepayment penalty...

  • Question 8 (of 10) value: 1.00 points On September 1. 2013, Susan Chao bought a motorcycle...

    Question 8 (of 10) value: 1.00 points On September 1. 2013, Susan Chao bought a motorcycle for $40,000. She paid S1,100 down and financed the balance with a five-year loan at an APR of 8.2 percent, compounded monthly. She started the monthly payments exactly one month after the purchase (ie., October 1, 2013). Two years later, at the end of October 2015, Susan got a new job and decided to pay off the loan. If the bank charges her a...

  • Practice Case 1: Rachana Boutique Rachana runs a boutique in the town. She started her business...

    Practice Case 1: Rachana Boutique Rachana runs a boutique in the town. She started her business on January 1, 2013 with capital of Rs. 3, 00,000 totally financed from her own savings. She hired a showroom at a monthly rent of Rs. 8,000 and paid a security deposit of Rs. 50,000; which is refundable at time of the termination of the tenancy without interest. The rent will increase by 10% every year. Rent for a month is paid in the...

  • Tucker Boats began business on September 1, 2013, ...Tucker Boats has adopted a September 30 as...

    Tucker Boats began business on September 1, 2013, ...Tucker Boats has adopted a September 30 as fiscal year end, just in time to stock new merchandise. On September 1, Joe ...hired a recent graduate, Henry Webster. In the next few days of September, he rented a sales office, boat garage, and lot space. The store is open Monday through Saturday and Joe is there all six days. Henry works 8 hours per day, Monday through Friday. Both Henry and Joe...

  • Complete the following Journal Entries: 1) On October 2nd, REI received the full payment (interest and...

    Complete the following Journal Entries: 1) On October 2nd, REI received the full payment (interest and principal) for the three-month $41,325 note issued on July 1st (transaction #1 – quarter 3). The interest received is for 3 months. 2) REI felt that their inventory levels were getting lower and they should purchase more units from EDL. On October 4th, REI purchased on account 500 DoorSpy units at $56 each. 3) On October 6th, Ella got a call from Larry who...

  • Gleim 6 Deductions from AGI [1] Which one of the following expenses does not qualify as...

    Gleim 6 Deductions from AGI [1] Which one of the following expenses does not qualify as a deductible medical expense? A. Cost of long-term care for a developmentally disabled person in a relative’s home. B. Special school for a deaf child to learn lip reading. C. Cost of elevator installed for individual who had heart bypass surgery (in excess of increase in value of individual’s home). D. Cost and care of guide dogs used by a blind person in his...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT