QUESTION 3 You have decided to buy a new car. The total cost, including options, fees and taxes, is $30,760. The dealer offers three financing options as long as you make a down payment of at least 15% and you decide to put down exactly 15% Option 1 a 3-year loan with an interest rate of 7% Option 2 a 5-year loan with an interest rate of 5% Your goal is to pay as little total interest on the loan as possible, making regular monthly payments on one of these two financing options. For each option, show the monthly payment amount and the total interest that will have been paid over the entire term of the loan.

QUESTION 3 You have decided to buy a new car. The total cost, including options, fees and taxes, is $30,760. The dealer offers three financing options as long as you make a down payment of at least 15% and you decide to put down exactly 15% Option 1 a 3-year loan with an interest rate of 7% Option 2 a 5-year loan with an interest rate of 5% Your goal is to pay as little total interest on the loan as possible, making regular monthly payments on one of these two financing options. For each option, show the monthly payment amount and the total interest that will have been paid over the entire term of the loan.

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 8FPE

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