Solve the problem. Suppose you want to buy a new car that costs $32,500. You have no cash- only your old car, which is worth $4,000 as a trade-in. 1) How much do you need to finance buy the new car? 2) The dealer says the interest rate is 4% add-on for 4 years. Find the total interest 3) Find the total amount to be repaid.
Solve the problem. Suppose you want to buy a new car that costs $32,500. You have no cash- only your old car, which is worth $4,000 as a trade-in. 1) How much do you need to finance buy the new car? 2) The dealer says the interest rate is 4% add-on for 4 years. Find the total interest 3) Find the total amount to be repaid.
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:Solve the problem.
Suppose you want to buy a new car that costs $32,500. You have no cash - only your old car, which is worth
$4,000 as a trade-in.
1) How much do you need to finance buy the new car?
2) The dealer says the interest rate is 4% add-on for 4 years. Find the total interest
3) Find the total amount to be repaid.
4) Find the monthly payment.
5) Find your total cost, for the new car plus interest.
6) What percent of the original price tag total did the financing cost?
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