What value would that investor place on the loan

Assignment Help Financial Management

Reference no: EM131014328

A Car Dealer sells a car with a Competitive Price of $20,000 to a Car Buyer, whose competitive rate of interest is 7%. The car dealer also provides a loan for this transaction, with the Loan Amount set at $20,500 and the contractual rate of interest at 7.7%. The loan is for 48 months. If a Loan Buyer (an investor) in the Secondary Market assumes that the Car Buyer will pay off this new loan after 22 months, what value would that investor place on the loan when she offers to buy the contract from the Car Dealer?

Reference no: EM131014328

Questions Cloud

Interest of coupons over two-year investment horizon : Suppose you bought an A-rated, 20-year maturity, 8% coupon bond with face value of $1,000 and semi-annual coupon payments. Suppose that immediately after you bought the bond the yield on such bonds decreased from 10% to 9% and remains at 9% until you..

Write statistical model that is the foundation for analysis : Constructing the ANOVA table. Seven explanatory variables are used to predict a response variable using a multiple regression. There are 140 observations. Write the statistical model that is the foundation for this analysis. Also include a descri..

Differences between the various disorders listed : Start by completing the attached table following the example provided for Cyclothymic Disorder. What are the similarities and differences between the various disorders listed

Knowledge management and knowledge management programs : 1. How could CRM and PRM systems solve this problem? 2. What is the role of knowledge management and knowledge management programs? a. Define knowledge management and explain its value to businesses

What value would that investor place on the loan : A Car Dealer sells a car with a Competitive Price of $20,000 to a Car Buyer, whose competitive rate of interest is 7%. The car dealer also provides a loan for this transaction, with the Loan Amount set at $20,500 and the contractual rate of interest ..

What is the price you would pay for stock now : Credenza Industries is expected to pay a dividend of $1.20 at the end of the coming year. It is expected to sell for $62.00 at the end of the year. If its equity cost of capital is 8%, what is the price you would pay for this stock now?

What is the importance of confidentiality in a group : What is the importance of confidentiality in a group? How can a counselor ensure confidentiality within and outside of the group format

Organizational behavior analysis : In this assignment you will analyze the organizational behavior of your current or former employer. Describe how the following areas influence the organizational behavior in a negative or positive manner:

Why is it important for substance use disorders counselors : Why is it important for substance use disorders counselors to know what happens in support groups? How could this knowledge benefit treatment

User Account

All Pages