You are interested in arranging financing to purchase a new car from Bloomington Cars, Inc. The car that you want has a sticker price of $42,000, an instant rebate of $3,500, a fair market value of $39,000, and a great sound system. The salesperson, while smoothing over his comb-over, taps his pinky ring on the hood of the car and tells you, You picked the best car we have. I can also kick in a free Bloomington Cars coffee mug. Since you love the car, you hop up and down and say, Sold! Ill take it. You sign a loan contract for 60 monthly payments based on a rate of 7.3% per year and drive home with your new car and coffee mug, listening to that great sound system. (Your market rate of return for the risks you pose for a car loan is 5.5%.)

How much value did you destroy in pursuit of that great sound system and your free coffee mug (rounded to two places)?

Group of answer choices

$499.86

$3,000.06

$1,197.03

$2,324.09

None of the above

If you come to your senses in 12 months and realize what a bad deal you negotiated and would like to pay off this bad loan, how much do you owe (rounded to two places)?

Group of answer choices

$36,854.88

$33,014.89

$ 8,859.51

$32,578.27

None of the above

How much interest will you pay in the first year of the loan (rounded to two places)?

Group of answer choices

$9,213.72

$3,452.28

$6,621.72

$2,592.00

None of the above