The cash price for furniture for all rooms of a three-bed-room house is $9262 The...
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The cash price for furniture for all rooms of a three-bed-room house is $9262 The furniture can be financed by paying $ 500 down and $789 er month for 12 months. However, instead of making the sixths payment the borrower decides to pay the remaining balance and terminate the loan for the furniture.
Table 5 Annual Percentage Rate (APR) for Monthly Payment Loans Number of Monthly Payments (n) Annual Percentage Rate (APR) 13.0% 13.5% 14.0% 14.5% 15.0% 15.5% 16.0% Finance Charge per $100 of Amount Financed (h) 6 $3.83 $3.97 $4.12 $4.27 $4.42 $4.57 $4.72 12 7.18 7.46 7.74 8.03 8.31 8.59 8.88 18 10.61 11.03 11.45 11.87 12.29 12.72 13.14 24 14.10 14.66 15.23 15.80 16.37 16.94 17.51 30 17.66 18.38 19.10 19.81 20.54 21.26 21.99 36 21.30 22.17 23.04 23.92 24.80 25.68 26.57
A. Use the actuarial method to determine how much interest will be saved by repaying the loan early.
Saved Interest =
B. Use the rule of 78 to determine how much interest will be saved by repaying the loan early.
Saved interest =
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