PART 1

Its 2021, congratulations on graduating and landing your first job! You are on your way to becoming an industry icon! Now that you are done with school its time to buy a real car!

Youve gone through your financials and feel comfortable with a maximum car payment of $350/month. You havent saved enough to make a down payment, but you should be able to get a 36 month loan at 4% interest or a 60 month loan at 3.75% interest.

Use the amortization table you have created to determine what your option is in regards to financing your car.

1. What is the price of the car you can afford, given the above parameters?

2. How much interest would you pay over the life of the loan, given the above parameters?

3. If you made an additional payment of $20 each month, how early would you pay off either loan?

4. If you made an additional payment of $50 each month, how much less interest would you pay with either loan?

5. Which loan would you feel better about? Please explain why.