Solve the Problem

question 151

Multiple Choice

Solve the problem. Use an annual percentage rate table if necessary.
-Jessica used a fixed installment loan from her bank to finance her used car purchase. She borrowed $12,000 and has a 60 monthly payments of $249.10 each. Instead of making her 36th payment, Jessica decides to pay the remaining balance on the loan. What is the total amount due to pay off The balance (use the actuarial method) ?

• A) $5613.64
• B) $5676.95
• C) $5374.78
• D) $5926.05

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Definitions:

Variable Costs

Costs that vary directly with the level of production, such as materials and labor.

Long Run

A period of time in economics during which all factors of production and costs are variable.

Apple Orchard

An agricultural area dedicated to the cultivation of apple trees for the purpose of producing apples.

Long-run Equilibrium

A state in which all factors of production and costs are variable, allowing firms to make adjustments leading to the establishment of a market balance.