Final answer:
The down payment for Jason Wagoner's installment loan is $3,000. The amount of the loan is $9,000. The monthly payment is $281.97 and the finance charge is $877.92.
Step-by-step explanation:
To determine the down payment, amount of the loan, monthly payment, and finance charge for Jason Wagoner's installment loan, we can use the given information. The hot air balloon costs $12,000 and Jason's down payment is 25%, so the down payment is 25% of $12,000, which is $3,000. The loan amount is the remaining cost of the hot air balloon after the down payment, which is $12,000 - $3,000 = $9,000. To calculate the monthly payment, we use the formula for calculating the monthly payment for an installment loan:
Monthly payment = (Loan amount * Monthly interest rate) / (1 - (1 + Monthly interest rate)^(-Number of months))
In this case, the loan amount is $9,000, the APR is 9%, and the loan term is 36 months. Converting the APR to a monthly interest rate: Monthly interest rate = (APR / 12) / 100 = (9 / 12) / 100 = 0.0075.
Substituting these values into the formula:
Monthly payment = (9000 * 0.0075) / (1 - (1 + 0.0075)^(-36))
Using a calculator to solve this equation, the monthly payment comes out to be $281.97 (rounded to the nearest cent).
To calculate the finance charge, we multiply the monthly payment by the number of months and subtract the loan amount:
Finance charge = (Monthly payment * Number of months) - Loan amount
Substituting the values:
Finance charge = (281.97 * 36) - 9000 = $877.92 (rounded to the nearest cent).