Problem
To purchase a new truck it is necessary to borrow $18,550. The bank offers a 5 yr loan at an interest rate of 41% compounded monthly. You will be making monthly payments on the loan. What is the total amount that must be paid beck?
a. What is the number of time periods (n) you should use in solving this problem?
b. What rate of interest (0, per period of time. should be used in solving this problem?
c. Is the present single amount of money (P) known? (Yes, No)
d. Which time value factor should be used to solve this problem?
e. What amount must be paid back each month?
f. What is the total amount that will be paid back over the life of the loan?
g. How much of the total amount repaid represents interest?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.