If a Person Is Going to Borrow $30,000 for a Car

question 53

Multiple Choice

If a person is going to borrow $30,000 for a car and pay it off with a constant mortgage payment every month for 5 years, what do you know about their car payment (if the interest rate is positive) ?

• A)Nothing.
• B)The payment is more than $500 per month.
• C)The payment is exactly than $500 per month.
• D)The payment is less than $500 per month.

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Definitions:

Equilibrium Price

The market price where the quantity of goods supplied is equal to the quantity of goods demanded.

Price Ceiling

A government-imposed limit on how high a price is charged for a product, commodity, or service.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.

Price Ceiling

A legal maximum price that can be charged for a good or service, intended to protect consumers from high prices.