Excited to buy her dream car, Molly rushes into her local Jeep dealership. Molly picks out a car, sits down at the financing desk, and hears the following, “Well we ran your credit history. You’ve got a really thin file just a years worth of student loan payments. The deal you saw was for ‘well- qualified buyers.’ The best deal we can offer you is 6.6% for 60 months. A little more bad news, the cash allowance is also based on credit history, so you don’t qualify for $500. That said, you’re excited about a keep and I want to see you driving one, so I can do $400 for you. How much total interest will Molly pay using this plan? How much will Molly’s monthly payment be using the Bankrate calculator in the screen shot below?
Excited to buy her dream car, Molly rushes into her local Jeep dealership. Molly picks out a car, sits down at the financing desk, and hears the following, “Well we ran your credit history. You’ve got a really thin file just a years worth of student loan payments. The deal you saw was for ‘well- qualified buyers.’ The best deal we can offer you is 6.6% for 60 months. A little more bad news, the cash allowance is also based on credit history, so you don’t qualify for $500. That said, you’re excited about a keep and I want to see you driving one, so I can do $400 for you. How much total interest will Molly pay using this plan? How much will Molly’s monthly payment be using the Bankrate calculator in the screen shot below?
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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Question
Excited to buy her dream car, Molly rushes into her local Jeep dealership. Molly picks out a car, sits down at the financing desk, and hears the following, “Well we ran your credit history. You’ve got a really thin file just a years worth of student loan payments. The deal you saw was for ‘well- qualified buyers.’ The best deal we can offer you is 6.6% for 60 months. A little more bad news, the cash allowance is also based on credit history, so you don’t qualify for $500. That said, you’re excited about a keep and I want to see you driving one, so I can do $400 for you. How much total interest will Molly pay using this plan? How much will Molly’s monthly payment be using the Bankrate calculator in the screen shot below?
Transcribed Image Text:Molly is celebrating her exciting new career and wants to upgrade her junky old car for a shiny new Jeep Patriot.
She heads to Jeep's website and sees the following financing deals: USE THE MSRP $25,495 FOR ALL PARTS.
Latitude 4x4
Sport
Sport SE
Latitude
FWD
High Altitude
Finance for
0% APR
For 36 months
Plus up to $1,500
Cash Allowance
4x4
MSRP Starting at
$17,595
MSRP Starting at
$19,740
MSRP Starting at
$25,495
MSRP Starting at
$24,775
20 city/25 hwy
EPA est. MPG
O
2.4-Liter 14 DOHC
16-Valve Dual
VVT Engine
Finance for
1.9% APR
For 84 months
Plus up to $500
Cash Allowance
AutoStick
Automatic
Transmission
AD
4
2.000 b Towing
Capacity:
Maximum
CAD
View
Standard
Features
Note: For this activity, assume
Molly's going to pay the exact
MSRP of $25,495. This is most
likely NOT true, but we'll use it for
simplicity.
Part 1: 0% APR sounds PERFECT!
Answer the following questions using the details from the 0% offer above. Please round all answers to the
nearest dollar. SHOW ALL WORK.
Transcribed Image Text:Financial Literacy: Au X
Desmos | Graphing CX
bankrate.com/loans/loan-calculator/
Bankrate
Mortgages Banking Credit cards
Loan amount
$
Invalid loan amount
Loan term in years
Invalid loan term
Or
Loan term in months
0
Invalid loan term
Inbox
Interest rate per year
Loan Calculator
This loan calculator will help you determine the monthly payments on a loan. Simply enter the loan amount, term and interest rate in the fields below
and click calculate.
Invalid interest rate
The Bankrate loan calculator helps borrowers calculate amortized loans. These are loans that are paid off in regular installments over time, with fixed
payments covering both the principal amount and interest. Our calculator shows you the total cost of a loan, expressed as the annual percentage rate,
or APR. Loan calculators can answer questions and help you make good financial decisions.
Add extra payments
X Financial Literacy: Au X
Loans Investing
%
B Loan Calculator | Bar X
Home equity Real estate
Calculate
Quiz: Financial Litera X
Insurance
Total principal paid
Total interest paid
Retirement
Financial Literacy: Au X
Monthly payments
$93.22
Compare loan rates
Sign In
Show amortization schedule
+
$5,000
$592.91
Create Ac
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