(25 Points) 2. You have decided to purchase a new car and trade-in your old...
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(25 Points) 2. You have decided to purchase a new car and trade-in your old car. The car dealer has offered you a trade-in value of $25,000 on your old car. The car dealer will finance the remaining cost of the new car, however, you have decided that the maximum monthly car payment that you can afford is $600.00. Your loan rate will be 6 percent APR and you will be financing for 5 years (60 monthly payments). What is the maximum amount that you can pay for the car (remember the trade in value of your old car is $25,000) Financed for 60 months I/YR = 6% PMT - $600 PVA? Hint: Please use the following to determine your maximum loan amount given your maximum monthly loan payment is S500.00 PVA - Payment 1-(+r) ] N=60 Maximum amount that you can pay for the car
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