A car loan requires 6 monthly payments of $250 and has a 6% APR.1
(No principal amount was given)
(A) What is the present value of the loan one month before the first payment is due?
(B) A month from now, just after the first payment is made, what is the outstanding balance on the loan?
(C) If the loan were modified so that the APR was 0% in the first year, and 7.2% in the following 4 years, what would be the (constant) monthly payment have to be in order for you to borrow the same amount as computed in part (a)? (0 payments in the first year)