A used car dealer advertises financing at 0% interest for 3 years with monthly payments. You must
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Question:
A used car dealer advertises financing at 0% interest for 3 years with monthly payments. You must pay a $500 processing fee at signing. The car you like costs $9000.
a) What is your effective annual interest rate?
b) You think the dealer would accept $8,200 if you paid cash. What effective annual interest rate would you be paying if you financed with the dealer?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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