A friend of yours just bought a new sports car with a 4000


A friend of yours just bought a new sports car with a $4,000 down payment, and her $25,000 car loan is financed at an interest rate of 0.25% per month for 48 months. After 2 years, the "Blue Book" value of her vehicle in the used-car marketplace is $11,000.

a. How much does your friend still owe on the car loan immediately after she makes her 24th payment?

b. Compare your answer in Part (a) to $11,000. This situation is called being "upside down." What can she do about it?

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Financial Management: A friend of yours just bought a new sports car with a 4000
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