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You are shopping for a car and read the following advertisement in the newspaper: "Own a new Spitfire! No money down. Four annual payments of just $20,000" You have shopped around and know that you can buy a Spitfire for cash for $64,000 What is the interest rate the dealer is advertising (what is the IRR of the loan in the advertisment?) Assume that you must make the annual payments at the end of each year. 1. THE IRR OF THE LOAN IN THE ADVERTISEMENT IS % (round to 3 decimal places)

You are shopping for a car and read the following advertisement in the newspaper: "Own a new Spitfire! No money down. Four annual payments of just $20,000" You have shopped around and know that you can buy a Spitfire for cash for $64,000 What is the interest rate the dealer is advertising (what is the IRR of the loan in the advertisment?) Assume that you must make the annual payments at the end of each year. 1. THE IRR OF THE LOAN IN THE ADVERTISEMENT IS % (round to 3 decimal places)

Essentials Of Investments
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
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You are shopping for a car and read the following advertisement in the newspaper: "Own a new Spitfire! No money down. Four annual payments of just $20,000" You have shopped around and know that you can buy a Spitfire for cash for $64,000 What is the interest rate the dealer is advertising (what is the IRR of the loan in the advertisment?) Assume that you must make the annual payments at the end of each year. 1. THE IRR OF THE LOAN IN THE ADVERTISEMENT IS % (round to 3 decimal places)
Transcribed Image Text:You are shopping for a car and read the following advertisement in the newspaper: "Own a new Spitfire! No money down. Four annual payments of just $20,000" You have shopped around and know that you can buy a Spitfire for cash for $64,000 What is the interest rate the dealer is advertising (what is the IRR of the loan in the advertisment?) Assume that you must make the annual payments at the end of each year. 1. THE IRR OF THE LOAN IN THE ADVERTISEMENT IS % (round to 3 decimal places)
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