document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1207424>Question 1207424</A>: <I><SPAN STYLE=\"word-break: break-all;\"> A car was purchased for $1500 down and payments of $265 at the end of each month for four years. Interest is 9% compounded quarterly.
(a) What was the purchase price of the car?
(b) How much interest will be paid?  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #845302 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=845302\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> payments at the end of each month = 265.<BR>\n" );
document.write( "number of payments = 4 * 12 = 48.\r<BR>\n" );
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document.write( "interest rate is 9% compounded quarterly.<BR>\n" );
document.write( "the quarterly interest rate is 9/4 = 2.25% per quarter..<BR>\n" );
document.write( "the quarterly growth factor is 1.0225.<BR>\n" );
document.write( "the effective annual growth factor is 1.0225 ^ 4 = 1.0983083319.<BR>\n" );
document.write( "the effective monthly growth factor is 1.0983083319 ^ (1/12) = 1.007444443.<BR>\n" );
document.write( "the effective monthly growth rate is that minus 1, then multiplied by 100 = .7444443%.\r<BR>\n" );
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document.write( "i used the texas instruments business analyst 2 calculator to solve this.<BR>\n" );
document.write( "inputs are:<BR>\n" );
document.write( "present value = 0<BR>\n" );
document.write( "payments at the end of each month are -265.<BR>\n" );
document.write( "future value = 0<BR>\n" );
document.write( "interest rate per month = .7444443%.<BR>\n" );
document.write( "number of payments = 48.\r<BR>\n" );
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document.write( "calculator says that the present value of the loan payments is equal to 10,662.52591<BR>\n" );
document.write( "round to the nearest penny to get 10662.53<BR>\n" );
document.write( "add the 1500 down payment to that to get 12,162.53<BR>\n" );
document.write( "that's the price of the car.<BR>\n" );
document.write( "round as required.\r<BR>\n" );
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document.write( "the online calculator at <a  rel=nofollow HREF= \"\" target = \"_blank\"></a> works the same was as the texas instrument calculator, except that it rounds the results to the nearest penny.\r<BR>\n" );
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document.write( "the results from using that calculator are:\r<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" src = \"http://theo.x10hosting.com/2024/060303.jpg\">\r<BR>\n" );
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document.write( "the amount of interest that was paid was the sum of all the payments minus the present value of the loan = 48 * 265 minus 10,662.53 = 2057.47.<BR>\n" );
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