In: Finance
4.Draymondvisits a car dealership looking for a sports car to cruise the city in style. He tells thedealership that he can repay a loan at $475per month for the next sixyears. If thedealership’s bankis charging customers 6.36%(APR), how much would it be willing to lend Draymond?
A. lessthan $28,400
B. more than $28,400 but less than $29,125
C. more than $29,125 but less than $29,850
D. more than $29,850 but lessthan $30,675
E. more than $30,675
5.A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $2,500 per month for the next threeyears and then $3,000 per month for another twoyears afterthat.If the bank ischarging customers 7.56%APR, how much would it be willing to lendthe business owner?
A. more than $133,625
B. more than $132,750, but less than $133,625
C. more than $131,875, but less than $132,750
D. morethan $131,000, but less than $131,875
E.less than $131,000
14.Howardjust took out a $18,000 loan for hissmall business. The loan has a threeyearterm and repayment is in the form of threeequal end-of-year payments.The interest rate on the loan is 8.75%per year.How much principal does Howardpay in the secondpayment?
A.$5,504
B.$5,986
C.$6,235
D.$6,510
E.$7,079