Barry Wood wants to buy a used car that costs $4,000. He has two possible loans in mind. One loan is through the car dealer; it is a three-year add-on interest loan at 6% and requires a down payment of $300. The second is through his credit union; it is a three-year simple interest amortized loan at 9.5% and requires a 10% down payment. (Round your answers to the nearest cent.) (a) Find the monthly payment for each loan. dealer $ credit union $ (b) Find the total interest paid for each loan. dealer $ credit union $ (c) Which loan should Barry choose? Why? He should choose the car dealer add-on interest loan because he pays less interest.He should choose the credit union simple interest loan because he pays less interest.
Barry Wood wants to buy a used car that costs $4,000. He has two possible loans in mind. One loan is through the car dealer; it is a three-year add-on interest loan at 6% and requires a down payment of $300. The second is through his credit union; it is a three-year simple interest amortized loan at 9.5% and requires a 10% down payment. (Round your answers to the nearest cent.) (a) Find the monthly payment for each loan. dealer $ credit union $ (b) Find the total interest paid for each loan. dealer $ credit union $ (c) Which loan should Barry choose? Why? He should choose the car dealer add-on interest loan because he pays less interest.He should choose the credit union simple interest loan because he pays less interest.
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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Barry Wood wants to buy a used car that costs $4,000. He has two possible loans in mind. One loan is through the car dealer; it is a three-year add-on interest loan at 6% and requires a down payment of $300. The second is through his credit union; it is a three-year simple interest amortized loan at 9.5% and requires a 10% down payment. (Round your answers to the nearest cent.)
(a) Find the monthly payment for each loan.
(b) Find the total interest paid for each loan.
(c) Which loan should Barry choose? Why?
| dealer | $ |
| credit union | $ |
(b) Find the total interest paid for each loan.
| dealer | $ |
| credit union | $ |
(c) Which loan should Barry choose? Why?
He should choose the car dealer add-on interest loan because he pays less interest.He should choose the credit union simple interest loan because he pays less interest.
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