Question

You agreed to a car loan with the following conditions: Down Payment $0 Loan Amount $37,500 Term: 5 years, with monthly payments Contractual Interest Rate 3.5% Your personal market rate of interest (for the risks you pose as a borrower) is 4%. The fair market value of the car is $33,500. You destroyed value with this transaction. If you assume a 5-year loan with monthly payments, what would have been a fair monthly payment? (In other words, what monthly payment would not have destroyed any value?) [show your answer in dollars and cents]

          You agreed to a car loan with the
following conditions:
Down Payment $0
Loan Amount $37,500
Term: 5 years, with monthly payments
Contractual Interest Rate 3.5%
Your personal market rate of interest
(for the risks you pose as a borrower) is
4%. The fair market value of the car is
$33,500. You destroyed value with this
transaction. If you assume a 5-year
loan with monthly payments, what
would have been a fair monthly
payment? (In other words, what
monthly payment would not have
destroyed any value?) [show your
answer in dollars and cents]

you agreed to a car loan with the following conditions down payment 0 loan amount 37500 term 5 years with monthly payments contractual interest rate 35 your personal market rate of interest 28746

Added by Carla P.

Question

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