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4. Suppose we are in a different situation: We have no problem making our monthly payments, but we would like to pay the car off

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4. Suppose we are in a different situation: We have no problem making our monthly payments, but we would like to pay the car off in three years instead of five. My wife, for example, has purchased two cars in the time I have known her, her first car she had a five year loan that she paid in three. For her current car, she again has a five year loan, but is well on track to pay in three. This is an excellent way to save money on interest on the loan. (a) Calculate the monthly payment if we change the term of the loan to three years, instead of five (assume the original loan amount - what you've written on the table in question two, and not the previous example). (b) Again, we don't want our monthly vehicle expense to be more than 10% of our monthly gross income. What should your yearly gross income be to afford this new monthly payment? That is, repeat questions 21-2m with this new monthly payment. (e) How much money did you save in interest by paying the car off in three years instead of five? To answer this, compute the difference in total payments for each option (you already calculated part of this in question 2g). 4. Suppose we are in a different situation: We have no problem making our monthly payments, but we would like to pay the car off in three years instead of five. My wife, for example, has purchased two cars in the time I have known her, her first car she had a five year loan that she paid in three. For her current car, she again has a five year loan, but is well on track to pay in three. This is an excellent way to save money on interest on the loan. (a) Calculate the monthly payment if we change the term of the loan to three years, instead of five (assume the original loan amount - what you've written on the table in question two, and not the previous example). (b) Again, we don't want our monthly vehicle expense to be more than 10% of our monthly gross income. What should your yearly gross income be to afford this new monthly payment? That is, repeat questions 21-2m with this new monthly payment. (e) How much money did you save in interest by paying the car off in three years instead of five? To answer this, compute the difference in total payments for each option (you already calculated part of this in question 2g)

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