An auto dealership is advertising that a new car with a sticker price of $ 3 4
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Question:
An auto dealership is advertising that a new car with a sticker
price of $ is on sale for $ if payment is made in full,
or it can be financed at interest for months with a monthly
payment of $ Note that payments times $ per payment
$ which is the sticker price of the car. By allowing you to
pay for the car in a series of payments starting one month from
now rather than $ now, the dealer is effectively loaning you
$ If you choose the financing option, what is the
effective interest rate that the auto dealership is earning on your
loan? Hint: Discount the payments back to current dollars, and use
Goal Seek to find the discount rate that makes the net present
value of the payments $Enter your answer as a percentage. If required, round your
answer to one decimal digit.
Related Book For
Essentials of Business Analytics
ISBN: 978-1285187273
1st edition
Authors: Jeffrey Camm, James Cochran, Michael Fry, Jeffrey Ohlmann, David Anderson, Dennis Sweeney, Thomas Williams
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