Final answer:
The principal for the loan is $13,399. The finance charges amount to $5,359.60. The monthly payment on the loan is $193.17.
Step-by-step explanation:
To calculate the principal of the loan, subtract the down payment from the price of the motorcycle. In this case, the principal would be $18,399 - $5,000 = $13,399.
To calculate the finance charges, multiply the principal by the APR and the loan term. The finance charges would be $13,399 * 0.05 * 8 = $5,359.60.
To find the total loan amount, add the principal and the finance charges. The total loan amount would be $13,399 + $5,359.60 = $18,758.60.
To calculate the monthly payment on the loan, use the formula:
Monthly Payment = (Principal * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^(-Number of Payments))
In this case, the monthly interest rate would be (5% / 12) / 100 = 0.00417, and the number of payments would be 8 * 12 = 96.
Substituting these values into the formula, the monthly payment would be:
Monthly Payment = ($13,399 * 0.00417) / (1 - (1 + 0.00417)^(-96)) = $193.17