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You decide to finance the purchase a used $10,000 car with $2500 down, borrowing $7500 from a local bank. They tell you the i

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Answer #1

ANSWER:

n = 2 yrs or 24 months

i = 6% per year or 6% / 12 = 0.5% per month

Monthly payment = borrowing amount(a/p,i,n) = 7,500(a/p,0.5%,24) = 7,500 * 0.0443 = 332.25

since the monthly payment is $332.25 and it is lesser then $350 the monthly payment calculated by them and so we reject the loan offer.

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