Question

Jana entered the following group of values into the TVM Solver of her

graphing calculator. N=48; 1% = 0.6; PV = ; PMT=-290; FV = 0; P/Y = 12; C/Y
= 12; PMT:END. Which of these problems could she be trying to solve?
OA. A person can afford a $290-per-month loan payment. If he is being
offered a 48-year loan with an APR of 7.2%, compounded monthly,
what is the mosioney that he can borrow?
B. A person can afford a $290-per-month loan payment. If he is being
offered a 4-year loan with an APR of 0.6%, compounded monthly,
what is the most money that he can borrow?
C. A person can afford a $290-per-month loan payment. If he is being
offered a 48-year loan with an APR of 0.6%, compounded monthly,
what is the most money that he can borrow?
D. A person can afford a $290-per-month loan payment. If he is being
offered a 4-year loan with an APR of 7.2%, compounded monthly,
what is the most money that he can borrow?

Answer 1

Jana is likely trying to solve option B:

"A person can afford a $290-per-month loan payment. If he is being offered a 4-year loan with an APR of 0.6%, compounded monthly, what is the most money that he can borrow?"

Explanation:

Option B is the correct choice because it aligns with the values entered by Jana into the TVM Solver. Jana set the loan term (N) to 48, which represents 48 months (4 years). The APR value of 0.6% also matches what Jana inputted.

By selecting option B, Jana is attempting to find out the maximum amount of money she can borrow given that she can afford a $290-per-month loan payment and is offered a 4-year loan with an APR of 0.6%, compounded monthly.

This calculation will help Jana determine the loan amount that corresponds to her desired monthly payment and the given loan terms.