8. Calculate: Nicholas is in the market for a used car. He has found the same sports car at two different dealerships and is now considering from which dealer he should purchase the car. Dealer 1 requires Nicholas to get the loan through its lending department. Dealer 1 has told Nicholas that, because the dealership does its own financing, it can get Nicholas the very best loan possible and Nicholas will only have to pay $247 per month for 60 months (5 years). Dealer 2 is selling the car for $12,000. Dealer 2 has told Nicholas he can use its financing or get his own lender, so Nicholas talked with his banir and learned that he can get a 5-year car loan for 4.9% APR. Dealer 2 has also offered Nicholas a 5-year loan for 5.9%. Based on these loan options, is Dealer 1's loan payment offer of $247 per month Nicholas's best deal? What is the lowest monthly loan payment Nicholas could get if the purchase price of the car is $17,000? a. $247 per month for 60 months from Dealer 1. b. $231 per month for 60 months from Dealer 2. c. $226 per month for 60 months from Nicholas's bank. d. There is not enough information to determine which loan option will have the lowest monthly payment.
8. Calculate: Nicholas is in the market for a used car. He has found the same sports car at two different dealerships and is now considering from which dealer he should purchase the car. Dealer 1 requires Nicholas to get the loan through its lending department. Dealer 1 has told Nicholas that, because the dealership does its own financing, it can get Nicholas the very best loan possible and Nicholas will only have to pay $247 per month for 60 months (5 years). Dealer 2 is selling the car for $12,000. Dealer 2 has told Nicholas he can use its financing or get his own lender, so Nicholas talked with his banir and learned that he can get a 5-year car loan for 4.9% APR. Dealer 2 has also offered Nicholas a 5-year loan for 5.9%. Based on these loan options, is Dealer 1's loan payment offer of $247 per month Nicholas's best deal? What is the lowest monthly loan payment Nicholas could get if the purchase price of the car is $17,000? a. $247 per month for 60 months from Dealer 1. b. $231 per month for 60 months from Dealer 2. c. $226 per month for 60 months from Nicholas's bank. d. There is not enough information to determine which loan option will have the lowest monthly payment.
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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Transcribed Image Text:8. Calculate: Nicholas is in the market for a used car. He has found the same sports car at two different
dealerships and is now considering from which dealer he should purchase the car. Dealer 1 requires Nicholas to
get the loan through its lending department. Dealer 1 has told Nicholas that, because the dealership does its
own financing, it can get Nicholas the very best loan possible and Nicholas will only have to pay $247 per
month for 60 months (5 years). Dealer 2 is selling the car for $12,000. Dealer 2 has told Nicholas he can use its
financing or get his own lender, so Nicholas talked with his banir and learned that he can get a 5-year car loan
for 4.9% APR. Dealer 2 has also offered Nicholas a 5-year loan for 5.9%. Based on these loan options, is
Dealer 1's loan payment offer of $247 per month Nicholas's best deal? What is the lowest monthly loan
payment Nicholas could get if the purchase price of the car is $17,000?
a. $247 per month for 60 months from Dealer 1.
b. $231 per month for 60 months from Dealer 2.
c. $226 per month for 60 months from Nicholas's bank.
d. There is not enough information to determine which loan option will have the lowest monthly payment.
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