Jacob Needs to Borrow $19 000 to Purchase a Car

question 20

Multiple Choice

Jacob needs to borrow $19 000 to purchase a car.If the interest rate is seven percent compounded monthly,which of the following is True when considering a five,seven or ten year term?

• A)If he selects a seven year term he will save interest by keeping his payments to $286.76 per month.
• B)If he selects a ten year term he will save $2385.28 in interest compared with the seven year term.
• C)If he selects a five year term he will save $1514.55 in interest compared with the seven year term.
• D)The overall interest will be the same,regardless of the term.

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Definitions:

Luxury Tax

A tax placed on expensive, non-essential products or services, aimed at curbing the consumption of luxury goods.

Middle Class

A social class made up of people who fall economically between the working class and the upper class, often defined by income, education, and occupation.

Customer Structures

The organization or arrangement of a company's customer base, typically segmented by needs, demographics, or behaviors.

Product

An item or service created through a process and offered to the market to satisfy a want or need.