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(b) If interest rates drop to 11%, approximately how much more can you borrow without increasing your monthly payment? (Estimate to within 100 dollars of the actual amount.) $ 500 X (c) Suppose your monthly payment is $120. Complete the table below showing how much you can borrow, without increasing your monthly payment, as a function of the interest rate. (Estimate to within 100 dollars of the actual amount.) Interest rate 1% 3% Loan amount $ 5% $ 7%

(b) If interest rates drop to 11%, approximately how much more can you borrow without increasing your monthly payment? (Estimate to within 100 dollars of the actual amount.) $ 500 X (c) Suppose your monthly payment is $120. Complete the table below showing how much you can borrow, without increasing your monthly payment, as a function of the interest rate. (Estimate to within 100 dollars of the actual amount.) Interest rate 1% 3% Loan amount $ 5% $ 7%

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter5: Making Automobile And Housing Decisions
Section: Chapter Questions
Problem 7FPE
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A contour diagram of the monthly payment on a 5 year car loan as a function of the interest rate and and the amount you borrow is shown in the figure below. loan amount ($) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 60 80 Loan amount $ 140- 100 $ 120 員員员虽 1 3 5 7 9 11 13 15 (a) If the interest rate is 13% and you borrow $6000, what is your approximate monthly payment? (Estimate to within 5 dollars of the actual amount.) $ 140 (b) If interest rates drop to 11%, approximately how much more can you borrow without increasing your monthly payment? (Estimate to within 100 dollars of the actual amount.) $ 500 X interest rate (%) (c) Suppose your monthly payment is $120. Complete the table below showing how much you can borrow, without increasing your monthly payment, as a function of the interest rate. (Estimate to within 100 dollars of the actual amount.) Interest rate 1 % 3% $ 5 % $ 7%
Transcribed Image Text:A contour diagram of the monthly payment on a 5 year car loan as a function of the interest rate and and the amount you borrow is shown in the figure below. loan amount ($) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 60 80 Loan amount $ 140- 100 $ 120 員員员虽 1 3 5 7 9 11 13 15 (a) If the interest rate is 13% and you borrow $6000, what is your approximate monthly payment? (Estimate to within 5 dollars of the actual amount.) $ 140 (b) If interest rates drop to 11%, approximately how much more can you borrow without increasing your monthly payment? (Estimate to within 100 dollars of the actual amount.) $ 500 X interest rate (%) (c) Suppose your monthly payment is $120. Complete the table below showing how much you can borrow, without increasing your monthly payment, as a function of the interest rate. (Estimate to within 100 dollars of the actual amount.) Interest rate 1 % 3% $ 5 % $ 7%
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