D Question 3 10 pts You are willing to pay $960 monthly for a car loan...

Question

Question

Answer 1

Answer #1

Loan amount = Present value of future monthly payments = monthly payment * [1-(1+i)^-n]/i

i = interest rate per period

n = number of periods

=>

loan amount = 960 * [1-(1+0.05/12)^-36]/(0.05/12)

= 32031.07

=>

maximum car price= 32031.07 + 2000

= 34031.07

Answer 2

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