Michael is shopping for a special automobile. He finds the exact car he? wants, a 1966 dark blue Pontiac GTO. This car is currently the property of a?neighbor, so to buy it for the? agreed-upon price of ?$40,000?, Michael must secure his own financing. He visits four different financial institutions and gets the following available? loans:
Bank? 1: 48 monthly payments of ?$948.60
Bank? 2: 72 monthly payments of ?$677.17
Bank? 3: 156 weekly payments of ?$280.33 (Assume a? 52-week year.)
Bank? 4: 20 quarterly payments of $2,344.21
Which loan should Michael? take? Hint: Which loan has the lowest? EAR?
What is the periodic interest rate for each loan from each bank?
If Michael selects Bank 1 for the? loan, what is the periodic interest rate on the? loan?
If Michael selects Bank 2 for the? loan, what is the periodic interest rate on the? loan?
If Michael selects Bank 3 for the? loan, what is the periodic interest rate on the? loan?
If Michael selects Bank 4 for the? loan, what is the periodic interest rate on the? loan?