7Edwin bought a car for $17,100 at an APR of 4.8 %, compounded monthly, by
agreeing to make monthly payments of $129.00 for 60 months. After 60 months,
Edwin plans to make a balloon payment. Usually, the monthly payment on a 60-
month loan for $17,100 at an APR of 4.8%, compounded monthly, is $321.13. Use
this information to answer the following four questions.
1.
How much will Edwin have paid
after 60 months with a monthly
payment of $129?
2.
How much in total will Edwin
have paid after making the
balloon payment?
3.
What will Edwin's balloon
payment be?
4.
Approximately how much more
expensive was the balloon
payment option for Edwin than if
he had just made the usual
monthly payment of $321.13 for
60 months?