Answer these 2 separate questions:
1)
You want to buy a new sports car from Muscle Motors for $36,000. The contract is in the form of a 72month annuity due at a 6.50 percent APR. 
Required:  
What will your monthly payment be? 2)

1) We will use
PVA due equation i.e. : 
PVA_{due} = (1 + r) PVA 
PVA_{due} = $36,000 = [1 + (.065 / 12)] × C[{1 – 1 / [1 + (.065 / 12)]^{72}} / (.065 / 12)] 
C = $ 605.16 ( by using the formula ) 2 ) Loan repayment amount = $15,000(1.09) = $ 16,350 The amount we will receive today is the principal amount of the loan times one minus the points: Amount received = $15,000 (1 .03 ) = $ 14,550 Now, we need to find the interest rate for this PV and FV. FV=PV±(1 +r)t $16,350 = $14,550(1 +r)1 ( 1 + r ) = $ 16350/ $ 14550 r = 1.12371 1= 0.12371= 12.32 %

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