2. Jeffrey purchased a new car. He wishes to set aside enough money in a bank account to pay maintenance on the car for the first 5 years. It has been estimated thatthe maintenance cost is as follows:YegrMaintenance Cost1P67208400310,080411,76013,440Assume the maintenance costs occur at the end of each year and that the bank pays 5% interest. How much should Jeffrey deposit in the bank now?

Interest Rate = 5% Year Maintenance Cost 1 6720.00 2 8400.00 3 10080.00 4 11760.00 5…

2. Jeffrey purchased a new car. He wishes to set aside enough money in a bank account to pay maintenance on the car for the first 5 years. It has been estimated that the maintenance cost is as follows: Year Maintenance Cost 1 P6720 8400 10,080 4 11,760 13,440 Assume the maintenance costs occur at the end of each year and that the bank pays 5% interest. How much should Jeffrey deposit in the bank now?

2. Jeffrey purchased a new car. He wishes to set aside enough money in a bank account to pay maintenance on the car for the first 5 years. It has been estimated that the maintenance cost is as follows: Year Maintenance Cost 1 P6720 8400 10,080 4 11,760 13,440 Assume the maintenance costs occur at the end of each year and that the bank pays 5% interest. How much should Jeffrey deposit in the bank now?

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

Section: Chapter Questions

Problem 1PS

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Similar questions

Bob wants to deposit $5000 into a bank account at the beginning of the next month and $200 per month into that same account at the end of that month and each subsequent month for the next 5 years. If the bank pays interest at the rate of 3% per year compounded monthly, how much will Bod have in his account at the end of 5 years? Assume that he makes no withdrawals during the 5 year period.
Juni buys a new car. Her auto loan is $12,000 with an annual interest rate of 3% compounded monthly for 5 years. Her monthly payment is $287 The following table shows the first payment in the amortization schedule. Payment number Loan Amount Payment Interest Principal Remaining Balance 1 12,000 287 ? ? ? Interest: $30 Interest: $8.61 Principal: $278.39 Principal: $257 Remaining Balance: $11,743 Remaining Balance: $ 11,721.61
For my newly purchased car, I have to pay five year-end installments of P250,000 each year for the next 5 years. For the first year, the maintenance will be covered by the dealer. For the second year the maintenance will cost me P10,000. For the remaining years, the maintenance will increase by P10,000 each year. How much should I set aside in a bank to meet the installments and maintenance expenses for the next 5 years if the interest rate is 8%? P 1,176,056 P 1,472,995 P1,071,902 P 1,090,450
An investor wants to save money to purchase real estate. He deposits $550 at the end of each year in an ordinary annuity that pays 4% interest, compounded annually. Answer each part. Do not round any intermediate computations nor answers. If necessary, refer to the list of financial formulas. (a) Find the total value of the annuity at the end of the 1 year. st 24 (b) Find the total value of the annuity at the end of the 2 nd year. (c) Find the total value of the annuity at the end of the 3 rd year.
Susan would like to buy a car. She went to the bank and got a loan for $40,000 at the annual interest rate of 4%, for 4 years. Calculate the monthly payment. Calculate the interest on the payment. Calculate the total payment. Make complete amortization schedule on excel
Peter has borrowed $8,600 to pay for his new car. The annual interest rate on the loan is 7.4 percent, and the loan needs to be repaid in four payments. What will be his annual payment if he begins his payment today now? (Round to the nearest dollar.) a. $2,850 b. $2,656 c. $2,385 d. $2,448
Carl borrowed P101,466 from his friend to pay for remodeling work on his house. He repaid the loan 20 months and 12 days later with simple interest at 1.36%. His friend then invested the proceeds in a bank for 10 years paying 5.83% compounded monthly. How much will his friend have at the end of the 10 years?
Howard owns a small electronics repair shop. He wants to borrow $10,000 now and repay it over the next 1 or 2 years. He believes that new diagnostic test equipment will allow him to work on a wider variety of electronic items and increase his annual revenue. Howard received 2-year repayment options from banks A and B. Amount to pay $ per year Amount to pay $ per year Year Bank A Bank B 1 5,378.05 5000.00 2 5,378.05 5755.00 Total Paid 10,756.10 10755.00 During a family conversation, Howard’s brother-in-law offered to lend him the $10,000 now and take $10,600 after exactly 1 year. Now Howard has three options and wonders which one to take. Which one is economically the best?
d) Sean rents out his three bedrooms flat for R5 000 per month, payable in advance. All his rental proceeds are deposited into a bank account that earns interest at a rate of 11% per annum compounded monthly. If no withdrawals are made from the bank account, what will be Sean's balance on this bank account 8 years from now
1. In buying a car, Amiel pays P 210,000.00 cash and agrees to pay P790,000.00 for 4 years at 12% interest compounded monthly. Find the cash value of the car. 2. Which is better for the depositor, an account that yields 15% compounded annually or 12% compounded monthly?
With cash flow diagram. Mia purchased a used car for $15,000. She wrote a check for $3000 as a down payment for the car and financed the $12,000 balance payable in 4 years but in monthly installments. The interest rate is 9% compounded monthly, and the loan will be repaid in equal monthly instalments for first two years and double it on the next two years. What is Mia's monthly car payment? a)576.3 b)205.20 c)274.11 d)372.12

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