1. Darla purchased a new car during a special sales promotion bythe manufacturer. She secured a loan from the manufacturer in theamount of $24,000 at a rate of 4.5%/year compounded monthly. Herbank is now charging 6.8%/year compounded monthly for new carloans. Assuming that each loan would be amortized by 36 equalmonthly installments, determine the amount of interest she wouldhave paid at the end of 3 years for each loan. How much less willshe have paid in interest payments over the life of the loan byborrowing from the manufacturer instead of her bank? (Round youranswers to the nearest cent.)
Interest paid to manufacturer=
Interest paid to bank =
savings =
2. Joe secured a loan of $10,000 two years ago from a bank foruse toward his college expenses. The bank charges interest at therate of 3%/year compounded monthly on his loan. Now that he hasgraduated from college, Joe wishes to repay the loan by amortizingit through monthly payments over 13 years at the same interestrate. Find the size of the monthly payments he will be required tomake. (Round your answer to the nearest cent.)
