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A young person has just started work borrowed $7,500 to purchase a car. They can afford to make monthly repayments of $660. Interest on the loan is charged first three months. Month 1 2 3 Balance at start of month ($) 7 500.00 6 892.50 6 280.75 Interest for month ($) 52.50 48.25 43.97 Payment 660 660 660 Balance at end of month ($) 6892.50 a) Use information from the table to show that the annual interest rate on the loan is 8.4% per annum b) Determine the balance at the beginning of month 4 Balance at start of month ($), and the interest for this month c) Write recursive rule to determine the balance at the end of each month d) The loan is fully repaid by the end of month 12. Determine to the nearest dollar,

A young person has just started work borrowed $7,500 to purchase a car. They can afford to make monthly repayments of $660. Interest on the loan is charged first three months. Month 1 2 3 Balance at start of month ($) 7 500.00 6 892.50 6 280.75 Interest for month ($) 52.50 48.25 43.97 Payment 660 660 660 Balance at end of month ($) 6892.50 a) Use information from the table to show that the annual interest rate on the loan is 8.4% per annum b) Determine the balance at the beginning of month 4 Balance at start of month ($), and the interest for this month c) Write recursive rule to determine the balance at the end of each month d) The loan is fully repaid by the end of month 12. Determine to the nearest dollar,

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 12EA: Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank...
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A young person has just started work borrowed $7,500 to purchase a car. They can afford to make monthly repayments of $660. Interest on the loan is charged first three months. Month 1 2 3 Balance at start of month ($) 7 500.00 6 892.50 6 280.75 Interest for month ($) 52.50 48.25 43.97 Payment 660 660 660 Balance at end of month ($) 6892.50 a) Use information from the table to show that the annual interest rate on the loan is 8.4% per annum b) Determine the balance at the beginning of month 4 Balance at start of month ($), and the interest for this month c) Write recursive rule to determine the balance at the end of each month d) The loan is fully repaid by the end of month 12. Determine to the nearest dollar, i) the amount of final repayment ii) the total amount of interest on the loan
Transcribed Image Text:A young person has just started work borrowed $7,500 to purchase a car. They can afford to make monthly repayments of $660. Interest on the loan is charged first three months. Month 1 2 3 Balance at start of month ($) 7 500.00 6 892.50 6 280.75 Interest for month ($) 52.50 48.25 43.97 Payment 660 660 660 Balance at end of month ($) 6892.50 a) Use information from the table to show that the annual interest rate on the loan is 8.4% per annum b) Determine the balance at the beginning of month 4 Balance at start of month ($), and the interest for this month c) Write recursive rule to determine the balance at the end of each month d) The loan is fully repaid by the end of month 12. Determine to the nearest dollar, i) the amount of final repayment ii) the total amount of interest on the loan
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