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Based on Questions #1 and #3, how much are you overpaying each month (rounded to two places)? Group of answer choices $22.86 $17.46 $8.24 $32.87 None of the above

Based on Questions #1 and #3, how much are you overpaying each month (rounded to two places)? Group of answer choices $22.86 $17.46 $8.24 $32.87 None of the above

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
Problem 1PS
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You are interested in arranging financing to purchase a new car from Bloomington Cars, Inc. The car that you want has a sticker price of $42,000, an instant rebate of $3,500, a fair market value of $39,000, and a great sound system. The salesperson, while smoothing over his comb-over, taps his pinky ring on the hood of the car and tells you, "You picked the best car we have. I can also kick in a free Bloomington Cars coffee mug." Since you love the car, you hop up and down and say, "Sold! I'll take it." You sign a loan contract for 60 monthly payments based on a rate of 7.3% per year and drive home with your new car and coffee mug, listening to that great sound system. (Your market rate of return for the risks you pose for a car loan is 5.5%.) Based on Questions #1 and #3 , how much are you overpaying each month (rounded to two places)? Group of answer choices $22.86 $17.46 $ 8.24 $32.87 None of the above
Transcribed Image Text:You are interested in arranging financing to purchase a new car from Bloomington Cars, Inc. The car that you want has a sticker price of $42,000, an instant rebate of $3,500, a fair market value of $39,000, and a great sound system. The salesperson, while smoothing over his comb-over, taps his pinky ring on the hood of the car and tells you, "You picked the best car we have. I can also kick in a free Bloomington Cars coffee mug." Since you love the car, you hop up and down and say, "Sold! I'll take it." You sign a loan contract for 60 monthly payments based on a rate of 7.3% per year and drive home with your new car and coffee mug, listening to that great sound system. (Your market rate of return for the risks you pose for a car loan is 5.5%.) Based on Questions #1 and #3 , how much are you overpaying each month (rounded to two places)? Group of answer choices $22.86 $17.46 $ 8.24 $32.87 None of the above
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