Drew is buying a new Toyota Camry. Its price is $23,500. He is putting $8,500 down and plans on financing the rest with a 60-month (5-year) loan at a simple interest rate of 6%. Using the attached table, which shows the payment for every $1,000, what will his monthly payment be for his loan and how much interest in total will he pay over the life of the loan?
Exhibit 7.4
A Table of Monthly Installment Loan Payments
(more or less than $1,000)
Loan Maturity
Rate of Interest 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.8% 13.0%
6 Months $169.60 $169.84 $170.09 $170.33 $170.58 $170.82 $171.07 $171.32 $171.56 $172.05 $172.50 $173.04 $173.54 $174.03 $174.53 $175.03 $175.53
12 Months $86.07 $86.30 $86.53 $86.76 $86.99 $87.22 $87.46 $87.69 $87.92 $88.50 $88.85 $89.32 $89.79 $90.26 $90.74 $91.21 $91.68
18 Months $58.23 $58.46 $58.68 $58.92 $59.15 $59.37 $59.60 $59.83 $60.06 $60.64 $60.99 $61.45 $61.92 $62.39 $62.86 $63.34 $63.81
24 Months $44.32 $44.55 $44.77 $45.00 $45.23 $45.46 $45.69 $45.92 $46.15 $46.73 $47.08 $47.55 $48.02 $48.49 $48.97 $49.45 $49.93
36 Months $30.42 $30.65 $30.88 $31.11 $31.34 $31.57 $31.80 $32.04 $32.27 $32.86 $33.22 $33.70 $34.18 $34.67 $35.16 $35.66 $36.16
48 Months $23.49 $23.71 $23.95 $24.18 $24.42 $24.65 $24.89 $25.13 $25.37 $25.97 $26.34 $26.83 $27.33 $27.84 $28.35 $28.86 $29.38
60 Months $19.33 $19.57 $19.80 $20.05 $20.28 $20.52 $20.76 $21.01 $21.25 $21.87 $22.25 $22.76 $23.27 $23.79 $24.32 $24.86 $25.40
Total $11,598.00 $11,712.00 $11,826.00 $11,940.00 $12,054.00 $12,168.00 $12,282.00 $12,396.00 $12,510.00 $12,738.00 $12,972.00 $13,212.00 $13,458.00 $13,710.00 $13,968.00 $14,232.00 $13,212.00
Note: The table shows the monthly payment for every $1,000 borrowed.
Please note that the last row of the table is the total amount paid over the life of the loan, not the interest paid.
