Question: Please draw cash flow diagram and include steps with proper notation to get solution. Will give thumbs up. Thank you. Problem 5 (25 points) Jeremy
Problem 5 (25 points) Jeremy wants to buy a new 2020 Porsche Boxter 2-door convertible. Its driving-out price is $55,000, but he has only 22,000 dollars in his bank account. He decided to finance $35,000 from a bank. The bank provides a 5-year auto loan with zero down-payment and annual installments (10% APR). (a) How much is the amount of the annual installment if the amount is distributed equally among 5 years? (b) Suppose that Ao is the amount of the annual installment obtained from part (a). Jeremy paid A, annually up to the end of year 3 and he wants to pay-off the remaining amount at the end of year 3. Determine the pay-off amount. (c) What is the total interest Jeremy paid if the loan is paid-off at the end of year 3
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