The ldquofly by nightrdquo used car lot uses the following, Ask an Expert

Finance

The “Fly By Night” Used Car Lot uses the following to illustrate their 8.1% finance plan on a car paid over 3 years.

Cost of the car: $10800

8.1% finance charge: $2624.4 (that is, 8.1%/year×$10800×3 years)

Total cost: $13424.4

Monthly payment: $13424.4/36=$372.9.

The first payment must be made on the date of purchase. Moreover, the dealer will pay you back 5% of the cost of the car at the end of 4 years if you return it. What is the true interest rate compounded monthly being charged?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92758258

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