Question: FINANCING A CAR The price of a new car is $16,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 10%/year compounded monthly.
a. What monthly payment will she be required to make if the car is financed over a period of 36 mo? Over a period of 48 mo ?
b. What will the interest charges be if she elects the 36-mo plan? The 48-mo plan?