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Tuture Value, I-Class 3. You want to buy a $15,000 car. a. Suppose the bank offers to lend you the entire $15,000, at an interest
Tuture Value, I-Class 3. You want to buy a $15,000 car. a. Suppose the bank offers to lend you the entire $15,000, at an interest rate of 5%, for 3 years. What will your monthly payment be? How much will the car end up costing you in total? How much interest will you end up paying? b. Instead of borrowing the entire $15,000, suppose you make a down payment of $2,000 (you borrow the remaining $13,000. What will your monthly payment be? How much will the car end up costing you in total? How much interest will you end up paying? c. Compare parts a and b. What is the advantage of making the $2.000 down payment? if you have $2,000 saved, is there any reason you can think of that you might choose to borrow the entire $15,000 rather than making the $2.000 down payment
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