Jeremy Is in the Process of Purchasing a Car

question 40

Multiple Choice

Jeremy is in the process of purchasing a car. The list price of the car is $42,000. If Jeremy pays cash for the car, the dealer will reduce the price by 10%. Otherwise, the dealer will provide financing where Jeremy must pay $8,990 at the end of each of the next five years. Compute the effective interest rate to the nearest percent that Jeremy would pay if he chooses to make the five annual payments?

• A) 5%.
• B) 6%.
• C) 7%.
• D) 8%.

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Definitions:

Multinational Business Enterprise

A company that operates in multiple countries, managing production or delivering services in more than one country.

Marketing Products

The process of promoting and selling goods or services, including market research and advertising.

Direct Export

The sale of goods and services from the manufacturer or producer directly to a buyer in another country.

International Legal Environment

The complex framework of laws, regulations, and treaties that govern international business transactions and relations.