Horatio has been saving money for 2 years to buy a new pickup truck, valued at $44,670. He is able to put...

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2. Horatio has been saving money for 2 years to buy a new pickup truck, valued at $44,670. He is able to put $9,500 down and will finance the balance at 6% for 3 years. Find the balance on his loan after the first payment.

SnapAndSolve AI · Accepted Answer

To find the balance on Horatio's loan after the first payment, we first need to calculate the financed amount and then determine the monthly payment using the interest rate and period provided.

Calculate the financed amount: $44,670 - $9,500 = $35,170.
Using the interest rate table, find the monthly payment factor for 6% annual interest over 3 years (36 periods). Since the table does not provide a 6% rate, we calculate it separately using the formula for monthly payment:
Monthly Payment = P * (r(1+r)^n) / ((1+r)^n - 1)
where P = principal ($35,170), r = monthly interest rate (6% annual = 0.5% monthly = 0.005), n = number of payments (36).
Calculate the monthly payment:
Monthly Payment = $35,170 * (0.005(1+0.005)^36) / ((1+0.005)^36 - 1) = $1,069.87 (approximately).
After the first payment, the balance is:
$35,170 - $1,069.87 = $34,100.13.

Therefore, the balance on the loan after the first payment is $34,100.13.

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Horatio has been saving money for 2 years to buy a new pickup truck, valued at $44,670. He is able to put...

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