Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller

Exercise 63

Use the loan payoff table to find the monthly payment (MP) and finance charge (FC) for each of the following loans. (See Example.)
Finding Amortization Payments
After a trade-in, Vickie Ewing owes $17,400 on a new Harley-Davidson motorcycle and wishes to pay the loan off in 60 months. She has found that she can finance the loan at 9% per year if she has a good credit history, but at 14, per year if she has a poor credit history.
(a) Find the monthly payment at both interest rates.
(b) Find the total finance charge at both interest rates.
(c) Find the extra cost of having poor credit.
SOLUTION