Question

1. A car dealer offers either 0% financing for 5 years or a $2000 rebate on a $27000 car. Assuming that you could find a loan for 6% for 60 months, which deal gives you a smaller payment? Show all your work.
2. You need to borrow money and you are considering two loans. The terms of the two loans are equivalent with the exception of the interest rates. Loan A offers a stated rate of 4.65% compounded daily. Loan B offers a stated rate of 4.70% compounded semi-annually. Which one do you prefer? You MUST show the calculation to support your choice.
3. A credit card charges an annual rate of 14.5% compounded monthly. Your current month’s bill is $4000. Suppose you keep paying $160 each month. How long will it take to pay off the bill?

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE