Good-Deal Auto developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Good-Deal offered a low down payment and low car payments for the first year after purchase. It believes that this promotion will bring in some new buyers. On January 1, 2019, a customer purchased a new €33,000 automobile, making a down payment of €1,000. The customer signed a note indicating that the annual rate of interest would be 8% and that quarterly payments would be made over 3 years. For the first year, Good-Deal required a €400 quarterly payment to be made on April 1, July 1, October 1, and January 1, 2020. After this one-year period, the customer was required to make regular quarterly payments that would pay off the loan as of January 1, 2022. Instructions a. Prepare a note amortization schedule for the first year c. Prepare a note amortization schedule for these new payments for the next 2 years d. What do you think of the new sales promotion used by Good-Deal
Good-Deal Auto developed a new sales gimmick to help sell its inventory of new automobiles.
Because many new car buyers need financing, Good-Deal offered a low down payment and low car payments for the first year after purchase. It believes that this promotion will bring in some new buyers.
On January 1, 2019, a customer purchased a new €33,000 automobile, making a down payment of €1,000. The customer signed a note indicating that the annual rate of interest would be 8% and that quarterly payments would be made over 3 years. For the first year, Good-Deal required a €400 quarterly payment to be made on April 1, July 1, October 1, and January 1, 2020. After this one-year period, the customer was required to make regular quarterly payments that would pay off the loan as of January 1,
2022.
Instructions
a. Prepare a note amortization schedule for the first year
c. Prepare a note amortization schedule for these new payments for the next 2 years
d. What do you think of the new sales promotion used by Good-Deal
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
