You make a down payment of $1,500 to purchase a used car worth $5,500.00 cash price and finance the balance by making payments of $145.00 every month for 30 months. What nominal rate of interest, compounded monthly, is charged? A) 7.07% B) 6.60% C) 5.50% O D) 6.80%

You make a down payment of $1,500 to purchase a used car worth $5,500.00 cash price and finance the balance by making payments of $145.00 every month for 30 months. What nominal rate of interest, compounded monthly, is charged? A) 7.07% B) 6.60% C) 5.50% O D) 6.80%

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

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

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You make a down payment of $1,500 to purchase a used car worth $5,500.00 cash
price and finance the balance by making payments of $145.00 every month for 30
months. What nominal rate of interest, compounded monthly, is charged?
O A) 7.07%
B) 6.60%
O C) 5.50%
D) 6.80%

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