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    Present Value of an annuity

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    You have $2000 to by a car, but want something more expensive. The bank will give you a loan @ 8.25% APR compounded monthly, which should be paid off in 3 years. But, the bank says my maximum monthly payment can be no more than $250.00. Closing costs are 8% of the loan amount. What is the most expensive car you can buy?

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    Solution Preview

    You have $2000 to by a car, but want something more expensive. The bank will give you a loan @ 8.25% APR compounded monthly, which should be paid off in 3 years. But, the bank says my maximum monthly payment can be no more than $250.00. Closing costs are 8% of the loan amount. What is the most expensive car you can ...

    Solution Summary

    This solution calculates the present value of an annuity.

    $2.19

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