Lauren purchased a car and the dealership offered financing at $4\%$ such that her monthly payments are

$$694\mathrm{.}87.$ If her financing rate was HIGHER than $4\%,$ and given no other changes, then what would be

expected?

Her monthly payment would be higher.

Her monthly payment would not change because the higher interest rate is offset by a decrease in time

value.

Her monthly payment would be lower.

Her monthly payment could be either higher or lower depending on how much higher the interest rate is

Her monthly payment would not change because the higher interest rate is offset by an increase in time

value.