A used car dealer advertises financing at 4% interestover
Chapter , Problem 7-47(choose chapter or problem)
A used car dealer advertises financing at 4% interestover 3 years with monthly payments. You must paya processing fee of $250 at signing. The car you likecosts $6000.(a)What is your effective annual interest rate?(b)You believe that the dealer would accept $5200if you paid cash. What effective annual interestrate would be paying if you financed with thedealer?(c)Compare these answers with those for Problem7-45. What can you say about what matters themost for determining the effective interest rate?
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