Henry Has $2,500 for a Down Payment and Thinks He

question 148

Multiple Choice

Henry has $2,500 for a down payment and thinks he can afford monthly payments of $400.If he can finance a vehicle with an 8%,3-year loan,what is the maximum amount Henry can spend on the car?

• A)$12,765
• B)$14,400
• C)$14,079
• D)$15,265
• E)$16,879

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Definitions:

Yield To Maturity

The total return anticipated on a bond if it is held until its maturity date, considering all interest payments and the principal repayment.

Par

The face value of a bond or other security, at which it can be redeemed at maturity or the amount of money equal in value to a particular share or bond.

Coupon

The yearly payment of interest to those holding bonds, represented as a percentage of the bond's nominal value.

Semi-Annual Coupon

A bond payment made to bondholders twice a year, representing interest on the bond's face value.