5). Loan Amount = Monthly Payment * [{1 - (1 + r)-n} / r]
= $300 * [{1 - (1 + 0.12/12)-48} / (0.12/12)]
= $300 * [0.3797 / 0.01]
= $300 * 37.9740 = $11,392.19
Total Amount Paid = Monthly Payment * No. of Payments = $300 * 48 = $14,400
Total Interest Paid = Total Amount Paid - Loan Amount = $14,400 - $11,392.19 = $3,007.81
6-a). Down payment = Purchase Cost * Down payment % = $180,000 * 0.20 = $36,000
Loan Amount = Purchase Cost - Down payment = $180,000 - $36,000 = $144,000
6-b). Monthly Payment = [Loan Amount * r] / [1 - (1 + r)-n]
= [$144,000 * (0.0738 / 12)] / [1 - {1 + (0.0738 / 12)}-(30*12)]
= $885.60 / 0.8900 = $995.06
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