E-Loan, an online lending service, offers a 36-month auto loan at 7.56

compagnia04

compagnia04

Answered question

2021-12-23

E-Loan, an online lending service, offers a 36-month auto loan at 7.56% compounded monthly to applicants with good credit ratings. If you have a good credit rating and can afford monthly payments of $350, how much can you borrow from E-Loan? What is the total interest you will pay for this loan?

Answer & Explanation

Jeremy Merritt

Jeremy Merritt

Beginner2021-12-24Added 31 answers

Periodic payments, PMT=$350 
Rate of interes per period, i=7.5612%=0.63%=0.0063 
Number of periods, n=36 
PV=PMT(1(1+i)ni) 
PV=350(1(1+0.0063)360.0063  11,241.81 
Interest = Total amount paid - Loan amount=350×3611241.81=$1,358.19

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