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3. Miguel is borrowing $20,000 to buy a car. He is taking out a 6-year loan. He consults interest rates at 2 different Banks. Bank of America Offers a 4.5% interest rate. While Wells Fargo offers an interest rate of 5.5%.

3. Miguel is borrowing $20,000 to buy a car. He is taking out a 6-year loan. He consults interest rates at 2 different Banks. Bank of America Offers a 4.5% interest rate. While Wells Fargo offers an interest rate of 5.5%.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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3. Miguel is borrowing $20,000 to buy a car. He is taking out a 6-year loan. He consults interest rates at 2 different Banks. Bank of America Offers a 4.5% interest rate. While Wells Fargo offers an interest rate of 5.5%. b. a. Compute the monthly payment to the nearest cent at Bank of America Find the total of all of the monthly payments for 6 years at Bank of America. c. What is the total interest at Bank of America? d. e. Compute the monthly payment to the nearest cent at Wells Fargo Find the total of all of the monthly payments for 6 years at Wells Fargo. f. What is the total interest at Wells Fargo? g. What is the difference between the total interest paid at Wells Fargo and Bank of America? h. Part g shows how in a big loan a difference of 1% interest rate can equal to about_ dollars. This is why it's important to have the best credit score possible to get the best interest rates possible.
Transcribed Image Text:3. Miguel is borrowing $20,000 to buy a car. He is taking out a 6-year loan. He consults interest rates at 2 different Banks. Bank of America Offers a 4.5% interest rate. While Wells Fargo offers an interest rate of 5.5%. b. a. Compute the monthly payment to the nearest cent at Bank of America Find the total of all of the monthly payments for 6 years at Bank of America. c. What is the total interest at Bank of America? d. e. Compute the monthly payment to the nearest cent at Wells Fargo Find the total of all of the monthly payments for 6 years at Wells Fargo. f. What is the total interest at Wells Fargo? g. What is the difference between the total interest paid at Wells Fargo and Bank of America? h. Part g shows how in a big loan a difference of 1% interest rate can equal to about_ dollars. This is why it's important to have the best credit score possible to get the best interest rates possible.
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