2. Suppose a client is in the market for a car. The client can afford to spend $500 per month, but she decides it is best to buy a cheap car now and use what is left of the $500 to save for a really nice one later. These savings will earn an effective annual rate of 9% interest. Suppose she decides to borrow $15,000 to buy a used car. The loan is for 48 months at a 7.8% APR. Three years later she sells this car for $4,500. How much money will the client have for her new car after paying off the old one assuming that all payments and compounding occurred on a monthly basis? (Do not consider sales or income taxes in the calculations.) Please show all calc's.
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