Answer:
3. $3511.31
4. 24 months (2 years)
5. about $9,069.57
Step-by-step explanation:
The attachments show the results from use of a time-value-of-money (TVM) app on a calculator with the given car loan values. Similar functions are available using a spreadsheet.
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<h3>3.</h3>You want the future value of the loan after 14 monthly payments have been made. The balance is 3,511.31 after 14 months.
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<h3>4.</h3>The number of payments required to bring the balance to zero is computed to be about 23.2553. It will take 24 months to pay off the loan. The last loan payment will not be the full amount.
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<h3>5.</h3>The total amount paid is approximately the monthly payment multiplied by the required number of payments:
$390 × 23.2553 ≈ $9,069.57
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<em>Additional comment</em>
The actual amount will depend on when in the last month the last payment is made. (Interest is generally charged on a daily basis when the payoff nears.)
The fourth attachment shows the balance after 23 payments is $99.23. The amount of interest charged for a full month on that amount is ...
$99.23×0.065×(1/12) = $0.54
So, the last payment due could be ...
$99.23 +0.54 = $99.77
The total of 23 regular payments and a last payment of $99.77 is ...
23×$390 +99.77 = $9069.77
If you want accuracy to the penny, it is best achieved by creating an amortization schedule, in which interest charges are rounded to the nearest cent each month.
