Sammy and Ruby Loveapet wish to purchase a new car. The car will cost $48,000. Their lender will provide a loan an 11 percent compounded annually, and the loan will be paid off in three annual end-of-year payments over three years. The Loveapet’s will put a downpayment of $5,000 on the auto and wish to know the following:
How much are their annual payments?
How much will be paid to the lender for interest each year?
What will their loan balance be at the end of each year?