Calculate the Amount Financed, Finance Charge, and the Amount of the Monthly

question 33

Short Answer

Calculate the amount financed, finance charge, and the amount of the monthly payments for the following add-on interest loan, rounding dollars to the nearest cent: $\begin{array}{lllllll}\text { Purchase } & \text { Down } & \text { Amount } & \text { Add-On } & \text { Number of } & \text { Finance } & \text { Monthly } \\\text { Price } & \text { Payment } & \text { Financed } & \text { Interest } & \text { Payments } & \text { Charge } & \text { Payment } \\\$ \$ 5,000 & 15 \% & & 9.75 \% & 12 & &\end{array}$

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Definitions:

Highly Marketable Securities

Securities that can be easily sold or converted into cash quickly without a significant loss in value.

Treasury Bills

Short-term government securities with maturities of one year or less, sold at a discount from their face value.

Warehouse Receipts

Documents that provide proof of ownership of commodities that are stored in a warehouse for protection and future sale.

Cross-Hedging

A strategy used to manage risk by hedging a position in one asset with a position in another asset that has a similar price movement but is not identical.