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he will lower the price by $2 000 from $18 000. Offer #2. You can get a loan through the dealer for 4 years at
he will lower the price by $2 000 from $18 000. Offer #2. You can get a loan through the dealer for 4 years at 2% per year, but price stays $18 000. You thought of a third way to buy the car. Borrow $16 000 from you bank for 4 years at 6% interest and use the money to buy the car for cash. For both loans, the first payment is at the end of the month. Hint Loan from dealer M [N] [1/Y] [PV] [PMT] [FV] Loan from bank and pay cash $14.75 $25.00 $21.20 the payments are the same dollars and cents QUESTION 18 An auto dealer is offering you to ways to buy the car you want. Offer #1. If you pay cash he will lower the price by $2 000 from $18 000. Offer #2. You can get a loan through the dealer for 4 years at 2% per year, but price stays $18 000. You thought of a third way to buy the car. Borrow $16 000 from you bank for 4 years at 6% interest and use the money to buy the car for cash. For both loans, the first payment is at the end of the month. Hint Loan from dealer M [N] [1/Y] [PV] [PMT] [FV] Loan from bank and pay cash borrow from the bank and pay cash take the loan through the dealer A bond was issued 2 years ago. The bond is paying coupon interest of 6% per year paid semiannual on face value of $100. The bond matures in five years. A brand-new bond with equivalent risk and maturing in five years has an interest rate of 7% (known as yield = 7.00%). How much should you pay for 6% coupon paying bond, for you to earn the same return as you could buying the new bond, 7.00%? $95.84 $100.00 $95.90 $94.60
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