1. Tanner is 18 years old and has received a full scholarship to play soccer in college. He has been working at the local grocery store since he was 16—part-time during the school year and full-time over the summer.

As this is his first year in college, Tanner decided not to work during the school year, but will make

$4,000 over the summer working at soccer camps and at the grocery store. Tanner has just found the car of his dreams. He has negotiated his best deal with the car dealer, and the “on-the-road” price, including tax, title, and license, is $21,500. He has $12,000 saved up, but he will need $1,500 of that money for college expenses in the next year. His parents have been saving money for his college as well. (LO 7-1)

a. What things does Tanner need to consider before purchasing the car?

b. What are his options for buying the car?

c. Tanner goes to his local banker and asks for a loan.

What item is the banker going to look at to make the loan decision? What options will the banker present to Tanner for purchasing the car and why?