Saturday

March 28, 2015

March 28, 2015

Posted by **SSS** on Sunday, August 3, 2014 at 5:40pm.

Kevin bought a new car for $22,000. He made a down payment of $5,500 and has monthly payments of $406.69 for 4 years. He is able to pay off his loan at the end of 30 months. Using the actuarial method, find the unearned interest and payoff amount.

- Math -
**Reiny**, Sunday, August 3, 2014 at 6:41pmbalance owing = 22000-5500 = 16500

We don't know the rate, but

if the monthly rate is i , then

16500 = 406.69(1 - (1+i)^-48)/i

Did some alternate numerical calculations and found

n = .007083333..

which makes it an annual rate of 8.5% compounded monthly

So balance owing after 30 months

= 16500(1.00708333..)^30 - 406.69(1 - 1.00708333^-30)/.007083333..

= $9434.63

Can you take it from there ?

**Answer this Question**

**Related Questions**

consumer math - Megan bought a car for $12,500. She made a down payment of $3,...

math - Pam bought a new bedroom suit for $2588.she made a down payment of $188 ...

math - Kate bought a new car priced at $21,300 with 15% down and the balance in ...

Finance Help! 3 questions - Hi, i was wondering if someone could please help me ...

Mathematics and investment - 1. Angelo wants to renovate his house in 3 years. ...

Monthly payment-Math - Okay here is my question two guys buy a new room for $10,...

Math - If you finance $50,000 of the purchase of your new home at 4.40% ...

Math - The price of a new car is 20,000. Assume that an individual makes a down ...

Math - Stacy requires $3,000 in three years to make a down payment on a new car...

math - Jennifer bought a brand new sports car. The price of the car was $14,900 ...