Challenge question I. Michael is shopping for a special automobile. He finds the exact car he...

Challenge question I. Michael is shopping for a special automobile. He finds the exact car he wants, a 1966 dark blue Pontiac GTO. This car is currently the property of a neighbor, so to buy it for the agreed-upon price of $45,000, Michael must secure his own financing. He visits four different financial institutions and gets the following available loans

Bank 1: 36 monthly payments of $1, 399.78

Bank 2: 60 monthly payments of $891.05

Bank 3: 312 weekly payments of $177.97(Assume a 52-week year.)

Bank 4: 16 quarterly payments of $3,297.87

Which loan should Michael take? Hint: Which loan has the lowest EAR? If Michael selects Bank 1 for the loan, what is the periodic interest rate on the loan?

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Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

ANSWER	GO FOR BANK 2 : IT HAS LOWEST EAR =7.23%
ANSWER	PERIODIC INTEREST RATE FOR BANK 1 =			0.625001%	[ROUNDED TILL 6 DECIMALS]

jeff jeffy answered 4 weeks ago

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Challenge question I. Michael is shopping for a special automobile. He finds the exact car he​...

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Challenge question I. Michael is shopping for a special automobile. He finds the exact car he...