You are considering the purchase of a car that costs $30,000. A local bank offers...
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Accounting
You are considering the purchase of a car that costs $30,000. A local bank offers to provide financing for this purchase at a rate of 9%. You are required to make 60 monthly payments to repay this loan. Depending on when the payments start, the monthly payment will differ. You are asked to consider the three scenarios below and solve for the payment amount in each scenario.
Scenario
The first payment starts at:
Monthly Payment
I
End of the first month
II
Beginning of the first month
III
End of the third month
Additional Question assuming Scenario I
Answer
Assume that you have completed payments for 10 months, what is the remaining loan balance?
[show your calculations.]
Answer & Explanation
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