You Are Interested in Purchasing a New Automobile That Costs

question 14

Multiple Choice

You are interested in purchasing a new automobile that costs $33,000. The dealership offers you a special financing rate of (0.75% per month) for 60 months. Assuming that you do not make a down payment on the auto and you take the dealer's financing deal, then your monthly car payments would be closest to ________.

• A)$548
• B)$685
• C)$959
• D)$1096

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Definitions:

Expiration

The end of an agreement or period, after which it is no longer valid or in effect.

S&P 100 Index

An American stock market index consisting of 100 large, widely held companies across multiple industries in the United States.

Exercise Price

The fixed price at which the holder of an option can buy (in the case of a call) or sell (in the case of a put) the underlying asset.

Option

A financial derivative that gives the buyer the right, but not the obligation, to buy or sell an asset at a set price on or before a given date.