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Amortized over a shorter period of time

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Now, let's think about a loan that is amortized over a shorter period of time: a car loan. You are trying to decide between buying a new or used car. The used car has relatively low mileage and is in good condition. Both vehicles come with good warranties. You can borrow either $15,000 (new) or $5,000 (used) over 3 years at 6.5% interest.

a. Your credit history will impact the interest rate that lenders are willing to offer you. If you have a below average credit score, you'll pay a higher interest rate. What are your monthly payments and total interest if you borrow $15,000 over 3 years at 8.0% interest?

Reference no: EM132503287

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