A car loan requires 6 monthly payments of 250 and has a 6, Ask an Expert

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A car loan requires 6 monthly payments of $250 and has a 6% APR.1

(No principal amount was given)

(A) What is the present value of the loan one month before the first payment is due?

(B) A month from now, just after the first payment is made, what is the outstanding balance on the loan?

(C) If the loan were modified so that the APR was 0% in the first year, and 7.2% in the following 4 years, what would be the (constant) monthly payment have to be in order for you to borrow the same amount as computed in part (a)? (0 payments in the first year)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91948565

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