You borrowed $5,000 from your parents to purchase a used car. You have agreed to make payments of $250 per month plus an additional 1% interest on the unpaid balance of the loan.
a. Is this problem an example of a geometric series or an arithmetic series? Support your answer mathematically by applying the concepts from this unit.
b. Find the first year’s monthly payments that you will make and the unpaid balance after each month.
c. Find the total amount of interest paid over the term of the loan.

Question

You borrowed $5,000 from your parents to purchase a used car. You have agreed to make payments of $250 per month plus an additional 1% interest on the unpaid balance of the loan.
a.	Is this problem an example of a geometric series or an arithmetic series? Support your answer mathematically by applying the concepts from this unit.
b.	Find the first year’s monthly payments that you will make and the unpaid balance after each month.
	c.	Find the total amount of interest paid over the term of the loan.