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Effective annual interest rate and monthly investment.
One of the largest automobile dealers in the city advertises a 4-year old car for sale as follows:
1.Cash price $6599 Or
2.A down-payment of $1000 with 48 monthly payments of $179.99
A student bought the car and made a down payment of $2000. The dealer charged her the same interest rate used in the advertised offer.
a) How much will the student pay each month for 48 months? Show calculations.
b) What effective annual interest rate is being charged? Show calculations.
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