Finance Assignment | Professional Writing
Challenge question I. Michael is shopping for a special automobile. He finds the exact car he wants, a 1966 dark blue Pontiac GTO. This car is currently the property of a neighbor, so to buy it for the agreed-upon price of $45,000, Michael must secure his own financing. He visits four different financial institutions and gets the following available loans:
Bank 1: 72 monthly payments of $767.21
Bank 2: 36 monthly payments of $1,404.95
Bank 3: 260 weekly payments of $206.46 (Assume a 52-week year.)
Bank 4: 16 quarterly payments of $3,281.53
Solve for all the banks.
Which loan should Michael take? Hint: Which loan has the lowest EAR?
If Michael selects Bank 1 for the loan, what is the periodic interest rate on the loan? (round to 4 decimals)
Get Finance homework help today