You have decided to buy a used car The dealer has offered you two options a Pay $500 per month for 20 months and an additional $10,000 at the end of 20 months The dealer is charging 24 percent per annum b When you buy the car, pay cash equal to the present value of the payments in option (a) Determ...

You have decided to buy a used car. The dealer has offered you two options: a. Pay

Question:

You have decided to buy a used car. The has offered you two options:
a. Pay $500 per month for 20 months and an additional $10,000 at the end of 20 months. The is charging 24 percent per annum.
b. When you buy the car, pay cash equal to the present value of the payments in option (a).
Determine how much cash the would charge in option (b).

Dealer
A dealer in the securities market is an individual or firm who stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). A dealer seeks to profit from the spread between the...