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Monthly loan payments

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P4-48 Monthly loan payments Tim Smith is shopping for a used car. He has found
one priced at $4,500. The dealer has told Tim that if he can come up with a
down payment of $500, the dealer will finance the balance of the price at a 12%
annual rate over 2 years (24 months).
a. Assuming that Tim accepts the dealer's offer, what will his monthly (end-of month)
payment amount be?
b. Use a financial calculator or Equation 4.15a (found in footnote 9) to help
you figure out what Tim's monthly payment would be if the dealer were
willing to finance the balance of the car price at a 9% annual rate.

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The solution explains how to determine the monthly loan payments

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a. The monthly payments would be such that the present value of payments would be equal to the loan amount. The loan amount is ...

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