9. Aisha is looking for a $20,000 loan to buy a car. One financial institution has agreed to give her the loan under the

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9 Aisha Is Looking For A 20 000 Loan To Buy A Car One Financial Institution Has Agreed To Give Her The Loan Under The 1 (43.62 KiB) Viewed 42 times

9. Aisha is looking for a $20,000 loan to buy a car. One financial institution has agreed to give her the loan under the following conditions: (i) She must pay interest at the fixed rate of 9.9% per year, compounded monthly. (ii) She must pay off the loan in equal monthly payments made at month-ends. (ii) She must pay off the loan in 5 or less years. She wants you to help her figure out if she can afford to pay off the loan in five years. Do the following (a) Determine the monthly interest rate j. (1) (b) Determine the total number n of payments she will make in 5 years (1) (c) Determine the value of the $20,000 loan five years from now. (1) (d) At this moment her monthly payment is unknown. Let it be P dollars per month. Use the forumla V=P to calculate the total value V of all the payments she will have to make in 5 years. (1) (e) The value you obtained above should equal the value of the loan five years from now. Use that information to form an equation and solve it for P. (1) (F) What is the total amount of money Aisha will pay in the five years?