4. Nombulelo Makwete has been shopping around for a loan to finance the purchase of a used car she is buying. She needs to borrow R205 000. She found four offers that seem to be attractive, but would like to choose the offer with the lowest annual interest rate. The information she was provided by the banks were as follows: Loan A B C D Principle amount R205 000,00 R205 000,00 R205 000,00 R205 000,00 Monthly payment -R9 842,64 -R7 207,19 -R5 448,90 -R4 169,49 Repayment term (months) 24 36 48 72 You may assume that the interest on all four loans above are compounded monthly. Which loan should Nombulelo take if she wants to choose the loan with the lowest annual interest rate?
4. Nombulelo Makwete has been shopping around for a loan to finance the purchase of a used car she is buying. She needs to borrow R205 000. She found four offers that seem to be attractive, but would like to choose the offer with the lowest annual interest rate. The information she was provided by the banks were as follows: Loan A B C D Principle amount R205 000,00 R205 000,00 R205 000,00 R205 000,00 Monthly payment -R9 842,64 -R7 207,19 -R5 448,90 -R4 169,49 Repayment term (months) 24 36 48 72 You may assume that the interest on all four loans above are compounded monthly. Which loan should Nombulelo take if she wants to choose the loan with the lowest annual interest rate?
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
Related questions
Question
Transcribed Image Text:4.
Nombulelo Makwete has been shopping around for a loan to finance the purchase
of a used car she is buying. She needs to borrow R205 000. She found four offers
that seem to be attractive, but would like to choose the offer with the lowest annual
interest rate. The information she was provided by the banks were as follows:
Loan
A
B
с
D
Principle
amount
a) Loan A
b) Loan B
c) Loan C
d) Loan D
e) None of the above
R205 000,00
R205 000,00
R205 000,00
R205 000,00
Monthly
payment
-R9 842,64
-R7 207,19
-R5 448,90
-R4 169,49
Repayment
term
(months)
24
36
48
72
You may assume that the interest on all four loans above are compounded monthly.
Which loan should Nombulelo take if she wants to choose the loan with the lowest
annual interest rate?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 7 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education