Tanya obtains a car loan of $5,000 on January 1, 1994, from Wheels Financing, to be paid in 36 monthly installments at a
Posted: Sun Jun 05, 2022 7:30 am
Tanya obtains a car loan of $5,000 on January 1, 1994, from
Wheels Financing, to be paid in 36 monthly installments at a 12%
nominal interest rate compounded monthly.
The first payment is due in one month. After the 14th payment,
Wheels Financing sells the remainder of the loan to Loans We Be for
a price that will yield Wheels Financing a 10% effective annual
yield.
Determine the price Loans We Be paid for the loan.
A < $2,400
B ≥ $2,400 but < $2,600
C ≥ $2,600 but < $2,800
D ≥ $2,800 but < $3,000
E ≥ $3,000
Wheels Financing, to be paid in 36 monthly installments at a 12%
nominal interest rate compounded monthly.
The first payment is due in one month. After the 14th payment,
Wheels Financing sells the remainder of the loan to Loans We Be for
a price that will yield Wheels Financing a 10% effective annual
yield.
Determine the price Loans We Be paid for the loan.
A < $2,400
B ≥ $2,400 but < $2,600
C ≥ $2,600 but < $2,800
D ≥ $2,800 but < $3,000
E ≥ $3,000