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2 . 3 To purchase a new car, you borrow $ 2 0 , 0 0 0 . The bank offers a six - year
To purchase a new car, you borrow $ The bank offers a sixyear loan at an interest rate of compounded annually. If you make only one payment at the end of the loan period, repaying the principal and interest:
a What is the number of time periods you should use in solving this problem?
b What rate of interest per period of time, should be used in solving this problem?
c Is the present single amount of money known? Yes or No
d Which time value factor should be used to solve this problem?
e What is the total amount that must be paid back?
f How much of the total amount repaid represents interest?
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