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Mathematics, 15.06.2021 19:20 jazzy4211
Paul wants to buy a car. He needs to take out a loan for $7000. The car salesman offers him a loan with an interest rate of 8%, compounded annually. Paul considers two options to repay the loan.
Option 1: Pay $200 each month, until the loan is fully repaid
Option 2: Make 24 equal monthly payments.
a. Use option 1 to calculate
the number of months it will take for Paul to repay the loan.
b. Use option 1 to calculate the total amount that Paul has to pay.
c. Use option 2 to calculate the amount Paul pays each month.
d. Use option 2 to calculate the total amount that Paul has to pay.
e. Give a reason why Paul might choose option 1.
f. Give a reason why Paul might choose option 2.
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Answers: 3
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Paul wants to buy a car. He needs to take out a loan for $7000. The car salesman offers him a loan w...
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