Question
In thepast, a car manufacturer advertised0% financing on many of its models. Forexample, a particular model had a cash price of $12,212.60. However, if you
In thepast, a car manufacturer advertised0% financing on many of its models. Forexample, a particular model had a cash price of $12,212.60. However, if you elected to buy the car under the0% financingdeal, then the manufacturer used a price of $14,256. If you chose a 48-month term, then the manufacturer calculated your monthly loan payments using the0% financing price instead of the cash price ($297 permonth). In the fineprint, the manufacturer was legally obliged to disclose the effective annual rate that it charged for the loan.
What rate did the manufacturer disclose?
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Entrepreneurial Finance
Authors: Chris LeachJ LeachRonald Melicher
3rd Edition
0324561253, 9780324561258
