PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk

Exercise 4

Calculating payments, interest, and APR on auto loan. After careful comparison shopping, Drew Redding decides to buy a new toyota Camry. With some options added, the car has a price of $23,558-including plates and taxes. Because he can't afford to pay cash for the car, he will use some savings and his old car as a trade-in to put down $8,500. He plans to finance the rest with a $15,058.00, 60-month loan at a simple interest rate of 4 percent.
a. What will his monthly payments be?
b. How much interest will Drew pay over the full (60-month) life of the loan?
c. What is the APR on this loan?