You want to buy a new car, but you can make an initial payment of only $2,000

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You want to buy a new car, but you can make an initial payment of only $2,000 and can afford monthly payments of at most $400.

a. If the APR on auto loans is 12% and you finance the purchase over 48 months, what is the maximum price you can pay for the car?

b. How much can you afford if you finance the purchase over 60 months?

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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Question Posted: Jun 30, 2016 09:10 AM

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You want to buy a new car, but you can make an initial payment of only $2,000

Question:

Step by Step Answer:

a Your monthly payments of 400 can support a loan of 1518958 This is computed as follows PV ...View the full answer

Fundamentals of Corporate Finance

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