Assume the car can be purchased for 0% down for 60 months (in lieu of rebate). A car with a sticker price of $42,100 with factory and dealer rebates of $5,100. Hint: See Section 11.2, Example 5. (a) Find the monthly payment if financed for 60 months at 0% APR. (Round your answer to the nearest cent.) $ (b) Find the monthly payment if financed at 2.5% add-on interest for 60 months. (Round your answer to the nearest cent.) $ (c) Use the APR approximation formula to find the APR for part (b). (Round your answer to one decimal place.) % (d) State whether the 0% APR or the 2.5% add-on rate should be preferred. 0% APR2.5% add-on rate
Assume the car can be purchased for 0% down for 60 months (in lieu of rebate). A car with a sticker price of $42,100 with factory and dealer rebates of $5,100. Hint: See Section 11.2, Example 5. (a) Find the monthly payment if financed for 60 months at 0% APR. (Round your answer to the nearest cent.) $ (b) Find the monthly payment if financed at 2.5% add-on interest for 60 months. (Round your answer to the nearest cent.) $ (c) Use the APR approximation formula to find the APR for part (b). (Round your answer to one decimal place.) % (d) State whether the 0% APR or the 2.5% add-on rate should be preferred. 0% APR2.5% add-on 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
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Assume the car can be purchased for 0% down for 60 months (in lieu of rebate).
A car with a sticker price of $42,100 with factory and dealer rebates of $5,100. Hint: See Section 11.2, Example 5.
(a) Find the monthly payment if financed for 60 months at 0% APR. (Round your answer to the nearest cent.)
$
(b) Find the monthly payment if financed at 2.5% add-on interest for 60 months. (Round your answer to the nearest cent.)
$
(c) Use the APR approximation formula to find the APR for part (b). (Round your answer to one decimal place.)
%
(d) State whether the 0% APR or the 2.5% add-on rate should be preferred.
$
(b) Find the monthly payment if financed at 2.5% add-on interest for 60 months. (Round your answer to the nearest cent.)
$
(c) Use the APR approximation formula to find the APR for part (b). (Round your answer to one decimal place.)
%
(d) State whether the 0% APR or the 2.5% add-on rate should be preferred.
0% APR2.5% add-on rate
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