Chuck Wells is planning to buy a Winnebago motor home. The listed price is . Chuck can get a secured add-on interest loan from his bank
payments below per month and amortize the loan in 42 months.
(a) Find Chucks monthly payment (in ) with these conditions. (Round your answer to the nearest cent.)
Your anower cannot be understood or graded. More Information
Can he pay off the loan and keep his payments under ?

Ask by Campbell Reed. in the United States

Mar 26,2025

Question

Chuck Wells is planning to buy a Winnebago motor home. The listed price is . Chuck can get a secured add-on interest loan from his bank
payments below per month and amortize the loan in 42 months.
(a) Find Chucks monthly payment (in ) with these conditions. (Round your answer to the nearest cent.)
Your anower cannot be understood or graded. More Information
Can he pay off the loan and keep his payments under ?

Ask by Campbell Reed. in the United States

Mar 26,2025

UpStudy AI · Accepted Answer

We start by noting that Chuck needs to finance $$\$155,\!000$$ over 42 months. Even if there were no interest, his monthly payment would be

$$
\text{Payment}_{\text{no interest}} = \frac{\$155,\!000}{42} \approx \$3,\!690.48.
$$

A secured add‐on interest loan works by computing interest on the entire principal for the term of the loan and then adding it to the principal before dividing equally by the number of months. In other words, if the annual interest rate were $$r$$ (expressed as a decimal) and the term is $$\frac{42}{12} = 3.5$$ years, the add‐on interest is

$$
\text{Interest} = \$155,\!000 \times r \times 3.5.
$$

Then the total amount to be repaid would be

$$
\text{Total Repayment} = \$155,\!000 + (\$155,\!000 \times r \times 3.5),
$$

and the monthly payment would be

$$
\text{Monthly Payment} = \frac{\$155,\!000 \left( 1 + r \times 3.5 \right)}{42}.
$$

Since even the no‐interest payment

$$
\frac{\$155,\!000}{42} \approx \$3,\!690.48
$$

already exceeds $$\$3,\!600$$, the addition of any interest will only increase the payment further.

Thus, regardless of the interest rate $$r$$ for the add‐on interest loan, Chuck cannot keep his monthly payments under $$\$3,\!600$$ for a $$\$155,\!000$$ loan amortized in 42 months.
Chuck cannot keep his monthly payments under \$3,600 for a \$155,000 loan over 42 months, even without interest.

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