Suppose that you are thinking about buying a car and have narrowed down your choices to two
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Question:
Suppose that you are thinking about buying a car and have narrowed down your choices to two options.The new-car option: The new car costs
$28,000
and can be financed with a
three-year
loan at
6.74%.
The used-car option: A three-year old model of the same car costs
$13,000
and can be financed with a
five-year
loan at
7.52%.
What is the difference in monthly payments between financing the new car and financing the used car? Use
PMT=Prn11+rnnt.
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