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

Transcribed Image Text:You want to make monthly payments of $501, but you don't want a car loan over your head for more
than 48 months, so you decide to go with the down payment option. How much of a down
payment do you need to make?
$
Round to the nearest dollar.

Transcribed Image Text:You are purchasing a new car for $27,600. The dealership offers you three options:
• 0% financing: 0 down and 0% financing for 48 months.
• Rebate: 0 down. If you choose the rebate, you will need to secure a loan for the balance at your
local bank.
• Down payment: Make a down payment of 5% or more and get financing at 1.5% compounded
monthly for 48 months:
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