Car loan is financed at an interest rate

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A friend of yours just bought a new sports car with a $4500 down payment, and her $27000 car loan is financed at an interest rate of 0.50 percent per month for 48 months. After 2 years, the "blue book" value of her vehicle in the used car marketplace is $13000.

1. How much does your friend still owe on the car loan immediately after she makes her 24th payment?

2. Compare your answer to part (a.) to $13000. This situation is called being "upside down". What can she do about it?

Reference no: EM13688014

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