Problem 2:

(20 pts) You've driving your hooptie for years and would like to buy a nice car as a graduation gift to yourself. The 2023 Audi A4 sells for roughly $40,300. The 2023 Honda Accord sells for $28,000. You've decided to use the $2000 in graduation gifts from family as a down payment. Your local credit union has offered you a 7% APR, a better rate than the dealership offered. You've decided to take out a loan for 72 months.

a) What is the monthly interest rate? What is the yearly effective interest rate?

b) What would be your monthly payment on the Audi A4? What about on the Honda Accord?

c) How much money would you save by purchasing the Honda instead of the Audi? (Hint: it's much more than just the difference is prices.)

PLEASE ANSWER QUESTION FULLY AND GIVE THE RIGHT RESPONSE MY WHOLE CLASS DEPENDS ON IT (Answer all parts please).