Q4. You are willing to buy a car which will cost you 20000 euros. A bank is willing to provides you a 20000 euros loan. The bank offers you two options: Option1: You need to pay 100 euros interest per month, and at the end of the 12th month, you need to repay the principal 20000 euros. Option2: You need to repay 1721 euros per month for 12 months. Using all these information provided, suppose your discount rate of return here is 0.5% monthly, show your payment schedule, and decide which options you will prefer? (Justify your answers from both quantitative and qualitative perspective)   Please give Step by Step Answer Otherwise i give DISLIKE  !!

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Q4. You are willing to buy a car which will cost you 20000 euros. A bank is willing to provides you a 20000 euros loan. The bank offers you two options: Option1: You need to pay 100 euros interest per month, and at the end of the 12th month, you need to repay the principal 20000 euros. Option2: You need to repay 1721 euros per month for 12 months. Using all these information provided, suppose your discount rate of return here is 0.5% monthly, show your payment schedule, and decide which options you will prefer? (Justify your answers from both quantitative and qualitative perspective)

 

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