Joseph Buys a Jeep for $60,000, Financing It with a Five-Year

question 4

Multiple Choice

Joseph buys a Jeep for $60,000, financing it with a five-year 6.5% APR loan paid monthly. He decides to pay an extra $50 per month in addition to his monthly payments. Approximately how long will he take to pay off the loan under these conditions?

• A) 4 years 4 months
• B) 4 years 9 months
• C) 4 years 6 months
• D) 4 years 10 months

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Definitions:

Inflation

The upward movement in the general price index of goods and services, which diminishes the purchasing ability.

Total Return

The overall financial gain or loss on an investment over a specific period, including dividends, interest, and capital gains.

Market

The collective system of buying, selling, and trading goods, services, or financial instruments among buyers, sellers, and intermediaries.

Discounted

Discounted involves adjusting the value of future cash flows to their present value using a specific interest rate, to account for time and risk.