Problem:
You need to borrow $85,000 for a new car. The annual interest rate is 16%, compounded quarterly. You will be making quarterly payments for three years.
Required:
Question 1: What is your quarterly payment?
Question 2: How much will you owe on the loan after you make the first payment?
Question 3: How much will you owe on the loan after you make the 2nd payment?
Note: Please explain comprehensively and give step by step solution.