HELPPP

justin buys a motorcycle for $10,000. The dealer is charging him an annual interest rate of 9.25% and is using the add-on method to compute monthly payments. If he pays off the loan in 72 months, what are his monthly payments? If he makes a down payment of $2,900, how much will his monthly payments be? Do not round until the final answer. Then, round to the nearest cent. A$432.78; $153.34 B $215.97; $279.14 C $215.97; $153.34 D $215.97; $307.27

Question

HELPPP

justin buys a motorcycle for $10,000. The dealer is charging him an annual interest rate of 9.25% and is using the add-on method to compute monthly payments. If he pays off the loan in 72 months, what are his monthly payments? If he makes a down payment of $2,900, how much will his monthly payments be? Do not round until the final answer. Then, round to the nearest cent. A$432.78; $153.34 B $215.97; $279.14 C $215.97; $153.34 D $215.97; $307.27

anonymous · Answer

The interest formula would apply here, p=c(1+r)^t

anonymous · Answer

p=10,000(1.00925)^6

anonymous · Answer

9%=0.09 for reference

anonymous · Answer

And excuse me, this would be exponential decay. So let me start from scratch.

anonymous · Answer

So p=c(1-r)^t

anonymous · Answer

p=10,000(1-0.0925)^6  72 months is equal to 6 years. Annual=Yearly

anonymous · Answer

p=10,000(0.9075)^6

anonymous · Answer

so 5585.72?

anonymous · Answer

oh well no cuz thats not in the answers above , so im not surewhat im doing wrong

anonymous · Answer

I'll explain it.

anonymous · Answer

First, we need to find out how much the interest is for each year. He is also paying monthly payments, not annual.

anonymous · Answer

oh ok i think i got the first part so its 215.97

anonymous · Answer

and then for the second part i minus 2900 from 10000

anonymous · Answer

So, the best thing to do first is to find the interest added each year. After we do that, we will be able to determine the how much he had to pay off each month in order to be able to pay off the 10K in 72 months.

anonymous · Answer

p=7100(0.9075)^6

anonymous · Answer

Let's find 0.9075^6 first

anonymous · Answer

oh ok i think i understand now

anonymous · Answer

0.558572823884 is the answer, but rounded, it is 0.56

anonymous · Answer

7100(0.56)=P, interest added

anonymous · Answer

P=3976, which is the interest added if he were to add a down payment first.

anonymous · Answer

ok thank you so much for your help

anonymous · Answer

i have another question im not sure if you can help

anonymous · Answer

And to what you said, 5585 is the interest for the entire 10K

anonymous · Answer

So it would be 15585 for the first one.

anonymous · Answer

A credit card calculates interest using the average daily balance method. The card charges 20.5% annual interest rate on the average daily balance. The following transactions occurred during the March 1 – March 31 billing period.

Find the average daily balance for the billing period. Round to the nearest cent.

anonymous · Answer

Okay this one,

anonymous · Answer

You have to add up all of the transactions. The Credit transaction is a Negative, since he is borrowing money.

anonymous · Answer

His starting balance is 2653.49

anonymous · Answer

so thats the average daily balance ?

anonymous · Answer

After you add up all of the numbers, you will get about 796.71

anonymous · Answer

June has 30 days in it, so divide this by 30.

anonymous · Answer

divide 796.71 by 30 ?

anonymous · Answer

Yup

anonymous · Answer

26.557

anonymous · Answer

Correct, round the 57 to the nearest hundreth, since we don't get anything lower than pennies.

anonymous · Answer

.557 rounded to the nearest hundreth is .56, therefore the daily balance is 26.56

anonymous · Answer

ok thank you i have such a hard time with these and i have like 7 more

anonymous · Answer

thansk you helped alot