Mary Lou has now graduated from college and is earning $28,000 per year. She would like to trade in her 1996 Nissan Stanza for a new car but is unsure what she can afford. She still owes 11 payments of $189 for a total of $1,970 on her Nissan and $5,800 to her father's equity line. Her father's equity line requires a minimum monthly payment of 2 percent of the outstanding balance, has an interest rate of 8.75 percent, and 4 years until maturity. Determine the required monthly payment on her father's equity line. What amount will the balloon payment be at the end of the term?
Calculate Mary Lou's current debt ratio assuming her net income is $22,100. Is it advisable for her to acquire any additional debt? Why?
Using the information given, what is Mary Lou's interest rate on her current auto loan?
Would Mary Lou qualify for a 10 percent, two-year loan to consolidate her two current payments? Assume the only criteria for qualification is a debt ratio less than or equal to 20 percent. Why?
answer all questions and their entirety