Suppose you are n me market for a new car worm $22 000 You are offered a deal to make a $2.000 down payment now and to pay me balance n equal end of month payments of $505 33 over a 48-month period Consider the following situations.
1. Instead of going through the dealer's financing you to make a down payment of $1 800 and take out an auto loan from a bank at 9.2% compounded monthly What would be your monthly payment to pay off the loan in four years?
2. If you were to accept me dealer's offer what would be me effective rate of merest per month the dealer charges on your financing?