Solve the Problem

question 54

Multiple Choice

Solve the problem. Use an annual percentage rate table if necessary.
-A retired couple buys a new recreational vehicle (RV) for $50,000. They make a down payment of $13,000 and finance the balance at 9.0% APR over 60 months. Before making the 30th payment, the Couple decides to pay the remaining balance on the loan. How much interest will the couple save (use the actuarial method) ?

• A) $2447.28
• B) $3346.09
• C) $2774.23
• D) $2476.10

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Definitions:

Market Pay

The average amount of compensation paid by employers for a specific job in the external job market.

Retirement Age

The age at which a person is eligible to retire from their occupation and begin receiving pension or retirement benefits.

Subminimum Wages

Wages paid to certain workers that are below the federal or state minimum wage level, often justified by specific conditions such as training periods or disabilities.

Fair Labor Standards Act

United States legislation that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week, among other protections for workers.