To purchase a new truck, you borrow $19000. The bank offers an interest rate of 5% compounded monthly. If you take a five-year loan and you will be making monthly payments, what is the total amount htat must be paid back?
a. What is the number of time periods (n) you should use in solving this problem?
b. What rate of interest (i), per period of time, should be used in solving this problem?
c. Is the present single amount oif money (P) known? Y or n
d. Which time value factor should beused to solve this problem?
e. What amount must be paid back each month?
f. What is the total amount that will be paid back over the life of loan?
g. What is the total amount of interest you will pay?
h. Draw a cash flow diagram