Answered: If you borrow $35,000 to buy a car on…

If you borrow $35,000 to buy a car on 10 years loan at 9% annual interest rate, what is the % of interest of total monthly payment in month 13?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 19PROB

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Concept explainers

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.

Question

Q.4

If you borrow $35,000 to buy a car on 10
years loan at 9% annual interest rate,
what is the % of interest of total monthly
payment in month 13?
Select one:
O 24.5%
O 15.9%
O 55.4%
O 38.4%
O 46.3%

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