You have decided to purchase a car. You have found a clean used car that will cost

Question:

You have decided to purchase a car. You have found a clean used car that will cost you $8,500. You can finance your purchase through the dealer at an annual rate of 12% for 24 months. The dealer requires a down payment of $2,000.

Required

A. What will be the amount of your monthly payments?

B. How much will you pay the dealer over the life of the loan?

C. How much of this amount will be interest?

D. If you decide to pay off the loan at the end of the first year, how much will you owe the dealer?

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...