12. Matthew wants to take out a loan to buy a car. He calculates that he can make repayments of $4,700 per year. If he can get a four-year loan with an interest rate of 7.3%, what is the maximum price he can pay for the car? Matthew wants to take out a loan to buy a car. He calculates that he can make repayments of $4,700 per year. If he can get a four-year loan with an interest rate of7.3%, what is the maximum price he can pay for the car?O A. $15,813O B. $18,976OC. $22,138O D. $25,301

Annual payment (P) = $4700 Interest rate (r) = 7.3% Number of annual payments (n) = 4

12. Matthew wants to take out a loan to buy a car. He calculates that he can make repayments of $4,700 per year. If he can get a four-year loan with an interest rate of 7.3%, what is the maximum price he can pay for the car?

12. Matthew wants to take out a loan to buy a car. He calculates that he can make repayments of $4,700 per year. If he can get a four-year loan with an interest rate of 7.3%, what is the maximum price he can pay for the car?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 20PROB

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Question

Matthew wants to take out a loan to buy a car. He calculates that he can make repayments of $4,700 per year. If he can get a four-year loan with an interest rate of
7.3%, what is the maximum price he can pay for the car?
O A. $15,813
O B. $18,976
OC. $22,138
O D. $25,301

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