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What value would that investor place on the loan

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A Car Dealer sells a car with a Competitive Price of $20,000 to a Car Buyer, whose competitive rate of interest is 7%. The car dealer also provides a loan for this transaction, with the Loan Amount set at $20,500 and the contractual rate of interest at 7.7%. The loan is for 48 months. If a Loan Buyer (an investor) in the Secondary Market assumes that the Car Buyer will pay off this new loan after 22 months, what value would that investor place on the loan when she offers to buy the contract from the Car Dealer?

Reference no: EM131014328

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