Answer:
It should sale the car for at least 6.853,55 to pay up the loan
Explanation:
We need to calculate the balance of the loan after 3-years
Montly payment:
[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]
PV 23,500
time 48
rate 0.009
[tex]23500 \div \frac{1-(1+0.009)^{-48} }{0.009} = C\\[/tex]
C $ 605.090
interest:
23,500 x 0.009 = 211.50
amortization on first period:
605.09 - 211.5 = 393.59
Amortization after three years: future value of an annuity of the first amortization
[tex]C \times \frac{(1+r)^{time} -1}{rate} = FV\\[/tex]
C 393.59
time 36
rate 0.009
[tex]393.59 \times \frac{(1+0.009)^{36} -1}{0.009} = FV\\[/tex]
FV $16,646.4462
Balance: 23,500 - 16,646.45 = 6.853,55
