What interest rate must you earn to buy your dream car

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Reference no: EM131985466

You wish to buy a car for $25,000. The dealer offers you a 4-year loan with 2% interest. About what are your monthly payments? $539.27 $553.36 $542.38 $547.71 Bank A has a 1 year loan for 6% compounded annually. Bank B has a loan for 5.9% compounded monthly. Which loan would you select for your business? Bank A: 6% nominal interest is a better rate than Bank B nominal interest. Bank B: 5.9% nominal interest is a better rate than Bank A 6% nominal interest. Bank A: the effective rate of 6.00% is better than Bank B effective rate. Bank B: the effective rate of 5.96% is better than Bank A effective rate. You want $100,000 in a savings account in 10 years to buy your dream car. You plan to invest $10,000 into the account each year. About what interest rate must you earn to buy your dream car? 18.5% 21.5% 19.4% 0.0%

Reference no: EM131985466

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