In the past, a car manufacturer advertised 0% financing on many of its models. For example,...
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In the past, a car manufacturer advertised 0% financing on many of its models. For example, a particular model had a cash price of $13,174.09. However, if you elected to buy the car under the 0% financing deal, then the manufacturer used a price of $15,408. If you chose a 48-month term, then the manufacturer calculated your monthly loan payments using the 0% financing price instead of the cash price ($321 per month). In the fine print, the manufacturer was legally obliged to disclose the effective annual rate that it charged for the loan. What rate did the manufacturer disclose? In the past, a car manufacturer advertised 0% financing on many of its models. For example, a particular model had a cash price of $13,174.09. However, if you elected to buy the car under the 0% financing deal, then the manufacturer used a price of $15,408. If you chose a 48-month term, then the manufacturer calculated your monthly loan payments using the 0% financing price instead of the cash price ($321 per month). In the fine print, the manufacturer was legally obliged to disclose the effective annual rate that it charged for the loan. What rate did the manufacturer disclose?
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Answer rating: 100% (QA)
AnswerEffective annual rate is 625 Explanation Effective annual interest rate is real interes... View the full answer
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
Posted Date:
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