1) Assume you are going to buy a new car with price of $18,000. You pay $3,000 down payment and borrow the rest for 4 years at interest rate 8%, with 48 equal installments. Compute your monthly payment.

2) David Salter has a personal automobile policy with coverage of $25,000/$50,000 for bodily injury liability, $25,000 for property damage liability, $5000 for medical payments, and a $500 deductible for collision insurance. How much will his insurance cover in each of the following situation? Will he have any out-of-pocket cost?

1. David loses control and skids on ice, running into a parked car and causing $4,000 damage to the unoccupied vehicle and $3,000 damage to his own car.
2. David runs a stop sign and causes a serious auto accident, badly injuring two people. The injured parties win lawsuits again him for $35,000 each.
3. Davids 18-year-old son borrows his car. He backs into a telephone pole and causes $600 damage to the car.