5. After 10 months of saving $500 per month, Kate has achieved her goal of saving $5,000 for a down payment on a new car. The new care is priced at $22,000 plus GST and PST. She will receive a trade in credit on her old beater of $1,000 plus put down the $5,000 she has saved. The remainder of the care will be financed through a loan. Kate would like to have monthly payments no greater than $450 per month. Kate is looking at options of paying off the loan over 36, 48 and 60 months. All the loans can be negotiated at an effective interest rate of 8%. Required:

a) What are the monthly payments for the three options?

b) What is the total cost of financing for the three options?

c) Which loan payment option would you recommend to Kate?