You want to buy a new car. Your budget can fit up to $500 per month...

  

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You want to buy a new car. Your budget can fit up to $500 per month for a car payment. The dealership offers three options for a loan: Option 1: A 4-year add-on loan with an annual interest rate r= 8% Option 2: A 5-year add-on loan with an annual interest rate r= 7% Option 3: A 6-year add-on loan with an annual interest rate r=6% For each of these three options, what is the maximum principal P (round dollar amounts to the nearest dollar) you can afford to borrow? Option 1: For option 1, the maximum amount you can afford to borrow is $ Option 2: For option 2, the maximum amount you can afford to borrow is $ Option 3: For option 3, the maximum amount you can afford to borrow is $ You want to buy a new car. Your budget can fit up to $500 per month for a car payment. The dealership offers three options for a loan: Option 1: A 4-year add-on loan with an annual interest rate r= 8% Option 2: A 5-year add-on loan with an annual interest rate r= 7% Option 3: A 6-year add-on loan with an annual interest rate r=6% For each of these three options, what is the maximum principal P (round dollar amounts to the nearest dollar) you can afford to borrow? Option 1: For option 1, the maximum amount you can afford to borrow is $ Option 2: For option 2, the maximum amount you can afford to borrow is $ Option 3: For option 3, the maximum amount you can afford to borrow is $

Answer rating: 100% (QA)

To find the maximum principal amount you can afford to borrow for each loan option we can use the fo... View the full answer