Problem
An engineering student bought a car at a local used car lot. Including tax and insurance, the total price was $6000. He is to pay for the car in 12 equal monthly payments, beginning with the first payment immediately (in other words, the first payment was the down payment). Nominal interest on the loan is 12%, compounded monthly. After six payments (the down payment plus five additional payments), he decides to sell the car. A buyer agrees to pay a cash amount to pay off the loan in full at the time the next payment is due and also to pay the engineering student $2000. If there are no penalty charges for this early payment of the loan, how much will the car cost the new buyer?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.