You want to buy a second-hand car today that costs $28,000,000 and you agree with the seller
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Question:
You want to buy a second-hand car today that costs $28,000,000 and you agree with the seller the following terms: You will pay the owner an initial fee of 40%. The balance will be paid with a payment of $6,000,000 in 8 months and a final payment in 16 months (as of today).
a. If the interest rate agreed with the seller is 1.55% per month, how much is the final payment?
b. Now suppose that the interest rate agreed with the seller is 15% per year, how much
is the final payment?
Please provide the procedure and explanations.
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston
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