Some years ago, Penny purchased the car of herdreams for

Chapter 4, Problem 4.67

(choose chapter or problem)

Some years ago, Penny purchased the car of herdreams for $25,000 by paying 20% down at purchasetime and taking a $20,000, 5-year, 6% peryear, compounded monthly loan with 60 monthlypayments of $386.66 each. She is examining herloan situation and would like to have some specificinformation. Help her obtain the following: (a) Verification of the current monthly paymentamount.(b) Total amount she will pay over the 5 years.(c) Total interest she will pay over the 5 yearsand the percentage this represents of theoriginal loan amount of $20,000. (d) After she missed payment #36 at the veryend of the third year, according to the loanagreement, the interest rate increased from6% to 10% per year, compounded monthly.Based on the remaining principal immediatelyafter the late payment, determine thenew monthly payment. Verify that this increasedamount is necessary to pay off theloan at the increased rate.(e) Penny is now in her fourth year, has paidthe increased payment for 12 payments,and wants to get rid of this loan completely.She wishes to know the remaining principalamount when payment #48 is due.There is no penalty for early repayment ofprincipal.