Nicole is taking out an amortized loan for $33,000 to buy a new car and is deciding between the offers from two lenders. She wants to know which one would be the better deal over the life of the car loan, and by how much. (a) A bank has offered her a 5-year car loan at an annual interest rate of 6.5%. Find the monthly payment. (b) Her credit union has offered her a 7-year car loan at an annual interest rate of 6.5%. Find the monthly payment. (c) Suppose Nicole pays the monthly payment each month for the full term. Which lender's car loan would have the lowest total amount to pay off, and by how much? • Bank The total amount paid would be $ ____ less than to the credit union. • Credit union The total amount paid would be $ ____ less than to the bank.

Nicole is taking out an amortized loan for $33,000 to buy a new car and is deciding between the offers from two lenders. She wants to know which one would be the better deal over the life of the car loan, and by how much. (a) A bank has offered her a 5-year car loan at an annual interest rate of 6.5%. Find the monthly payment. (b) Her credit union has offered her a 7-year car loan at an annual interest rate of 6.5%. Find the monthly payment. (c) Suppose Nicole pays the monthly payment each month for the full term. Which lender's car loan would have the lowest total amount to pay off, and by how much? • Bank The total amount paid would be $ less than to the credit union. • Credit union The total amount paid would be $ less than to the bank.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 8E

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