Question
Challenge question I. Michael is shopping for a special automobile. He finds the exact car he wants, a 1966 dark blue Pontiac GTO. This car
Challenge question I.
Michael is shopping for a special automobile. He finds the exact car he wants, a 1966 dark blue Pontiac GTO. This car is currently the property of a neighbor, so to buy it for the agreed-upon price of $45,000, Michael must secure his own financing. He visits four different financial institutions and gets the following available loans:
Bank 1:60 monthly payments of $880.48
Bank 2:48 monthly payments of $1,061.99
Bank 3:156 weekly payments of $315.37(Assume a 52-week year.)
Bank 4:24 quarterly payments of $2,295.81
What is the periodic interest rate on each loan? And...
Which loan should Michael take?Hint:Which loan has the lowest EAR?
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Finance For Small And Entrepreneurial Business
Authors: Richard Roberts
1st Edition
0415721008, 978-0415721004
