in 4 years. (a) If you expect to pay off the loan at $29000, what nominal annual interest rate, compounding monthly, will make this happen? 12X4 2. n=48 (A)2.29%/year (B) 3.72%/year (C)4.15%/year (D)4.83%/year P= 25 poof F= 29,000 12 [( 29.000 18 25, o 00 %3D

in 4 years. (a) If you expect to pay off the loan at $29000, what nominal annual interest rate, compounding monthly, will make this happen? 12X4 2. n=48 (A)2.29%/year (B) 3.72%/year (C)4.15%/year (D)4.83%/year P= 25 poof F= 29,000 12 [( 29.000 18 25, o 00 %3D

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Please answer all parts....

You are interested in buying a car at/$25,009! You plan to take a loan ana pay it oif
in 4 years.
1
(a)
If you expect to pay off the loan at $29000, what nominal annual interest rate, compounding
monthly, will make this happen?
12x 2
n=48
(A)2.29%/year
(B) 3.72%/year
(C) 4.15%/year
(D)4.83%/year
P= 25 poof
F= 29,000 #
125(29.000 6
25, 0 00
= 0.03716 X 100
B.716%
%3D
If you can secure a loan at 2.75%/year) compounding monthly, and still be willing to pay it
(b)
off at $29,000, how long will the loan be?
29,000
leg(-
(A)4.4 years
(B) 4.9 years
(C) 5.4 years)
(D)6.1 years
100
25, 000
= 5. 471 yaurs
%3D

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