4 Buying a CarYou are purchasing a new car for $27,600. The dealershipoffers you three options:• 0% financing: 0 down and 0% financing for 48 months.• Rebate: 0 down. If you choose the rebate, you willneed to secure a loan for the balance at your local bank.• Down payment: Make a down payment of 5% or moreand get financing at 1.5% compounded monthly for 48months.Use this information to answer questions 3-6 below. Use the Buying a Car information above to answer thisquestion.The rebate offer is $1400, and you can obtain a car loan atyour local bank for the balance at 4.98% compoundedmonthly for 48 months. If you choose the rebate, what isyour monthly payment?Round to the nearest dollar.

When a mortgage is to be had at a reduced quantity it's far referred to as a rebate offer. Under…

Answered: Use the Buying a Car information above…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

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 3FPE: Evaluating financing packages. Assume that you’ve been shopping for a new car and intend to finance...

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Similar questions

Evaluating financing packages. Assume that you’ve been shopping for a new car and intend to finance part of it through an installment loan. The car you’re looking for has a sticker price of $18,000. Custom Vehicles has offered to sell it to you for $3,000 down and finance the balance with a loan that will require 48 monthly payments of $333.67. However, a competing dealership will sell you the exact same vehicle for $3,500 down, plus a 60-month loan for the balance, with monthly payments of $265.02. Which of these two financing packages is the better deal?
Del Hawley, owner of Hawleys Hardware, is negotiating with First City Bank for a 1-year loan of 50,000. First City has offered Hawley the alternatives listed here. Calculate the effective annual interest rate for each alternative. Which alternative has the lowest effective annual interest rate? a. A 12% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year b. A 9% annual rate on a simple interest loan, with a 20% compensating balance required and interest due at the end of the year c. An 8.75% annual rate on a discounted loan, with a 15% compensating balance d. Interest figured as 8% of the 50,000 amount, payable at the end of the year, but with the loan amount repayable in monthly installments during the year
Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?

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Use the Buying a Car information above to answer this question. The rebate offer is $1400, and you can obtain a car loan at your local bank for the balance at 4.98% compounded monthly for 48 months. If you choose the rebate, what is your monthly payment? $_ Round to the nearest dollar.