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Suppose that you buy a car that costs $50,000, and you finance this purchase with a 5-year fixed-rate loan.
(a) If the rate is 10% per year, compounded annually, and you make your payments once a year (starting one year from now, for a total of 5 payments), how large is each payment?
(b) Suppose now that the rate is actually compounded monthly, and you make your payments once a month (starting one month from now, for a total of 60 payments). How large is each monthly payment?
Chelsey began the current year with a capital balance of $54,000 and had the following subsequent activity: 3/1 withdraw $20,0000 7/1 withdraw $10,000 9/1 contribute $5,000
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