You are interested in arranging financing to purchase a new carfrom Bloomington Cars, Inc. The car that you want has a stickerprice of $42,000, an instant rebate of $3,500, a fair market valueof $39,000, and a great sound system. The salesperson, whilesmoothing over his comb-over, taps his pinky ring on the hood ofthe car and tells you, “You picked the best car we have. I can alsokick in a free Bloomington Cars coffee mug.” Since you love thecar, you hop up and down and say, “Sold! I’ll take it.” You sign aloan contract for 60 monthly payments based on a rate of 7.3% peryear and drive home with your new car and coffee mug, listening tothat great sound system. (Your market rate of return for the risksyou pose for a car loan is 5.5%.)

What is your monthly payment (rounded to two places)?

Group of answer choices

$802.25

$777.78

$767.81

$707.98

None of the above

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Question 21 pts

How much value did you destroy in pursuit of that great soundsystem and your free coffee mug (rounded to two places)?

Group of answer choices

$499.86

$1,197.03

$3,000.06

$2,324.09

None of the above

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Question 31 pts

What would have been a “fair” monthly payment (rounded to twoplaces)?

Group of answer choices

$744.95

$837.61

$735.39

$767.43

None of the above

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Question 41 pts

Based on Questions #1 and #3, how much are you overpaying eachmonth (rounded to two places)?

Group of answer choices

$26.82

$17.46

$8.24

$32.87

None of the above

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Question 51 pts

If you come to your senses in 12 months and realize what a baddeal you negotiated and would like to pay off this bad loan, howmuch do you owe (rounded to two places)?

Group of answer choices

$36,854.88

$33,014.89

$8,859.51

$31,878.28

None of the above

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Question 61 pts

How much interest will you pay in the first year of the loan(rounded to two places)?

Group of answer choices

$9,213.72

$2,592.00

$6,621.72

$3,452.28

None of the above