What monthly payment will she be required to make if the car is financed over a period of 24 months? Over a period of 48 months? 24 months $ 48 months $ (b) What will the interest charges be if she elects the 24-month plan? The 48-month plan?

What monthly payment will she be required to make if the car is financed over a period of 24 months? Over a period of 48 months? 24 months $ 48 months $ (b) What will the interest charges be if she elects the 24-month plan? The 48-month plan?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

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Concept explainers

Calculating the Return On A Loan

Question

The price of a new car is $16,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 6%/year compounded monthly. (Round your answers to the nearest cent.)

(a) What monthly payment will she be required to make if the car is financed over a period of 24 months? Over a period of 48 months?

24 months	$
48 months	$

(b) What will the interest charges be if she elects the 24-month plan? The 48-month plan?

24-month plan	$
48-month plan	$

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