7. Alset Motors is offering the 2020 Tesla Model S Sedan (basic model) for $89,900. You "wheel and deal" and get the price down to $85,000 with no money down (100%-financing). The only difficulty is that the monthly payments on the 6.3%, seven-year loan are at the beginning of the month. а. What is the monthly payment on this loan? b. How much of the first payment is interest and how much is principal? (label them) How much of the sixteenth payment is interest and how much is principal? (label them) с. d. How much interest and how much principal would you pay in the loan's second year? (label them) е. How much interest and how much principal would you pay over the life of the loan? (label them)
7. Alset Motors is offering the 2020 Tesla Model S Sedan (basic model) for $89,900. You "wheel and deal" and get the price down to $85,000 with no money down (100%-financing). The only difficulty is that the monthly payments on the 6.3%, seven-year loan are at the beginning of the month. а. What is the monthly payment on this loan? b. How much of the first payment is interest and how much is principal? (label them) How much of the sixteenth payment is interest and how much is principal? (label them) с. d. How much interest and how much principal would you pay in the loan's second year? (label them) е. How much interest and how much principal would you pay over the life of the loan? (label them)
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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Transcribed Image Text:7. Alset Motors is offering the 2020 Tesla Model S Sedan (basic model) for $89,900. You "wheel and deal"
and get the price down to $85,000 with no money down (100%-financing). The only difficulty is that the
monthly payments on the 6.3%, seven-year loan are at the beginning of the month.
What is the monthly payment on this loan?
а.
b.
How much of the first payment is interest and how much is principal? (label them)
How much of the sixteenth payment is interest and how much is principal? (label them)
с.
d.
How much interest and how much principal would you pay in the loan's second year? (label them)
How much interest and how much principal would you pay over the life of the loan? (label them)
е.
Transcribed Image Text:6. Bradley Jones, age 27, is considering joining the MSIT Program in the fall of 2021. He is trying to figure
out if the program is worth the investment (at least in financial terms). He figures the he will have to pay
$30,000 per year tuition in October 2021 and then again in October 2022. He is certain the when he
graduates in June 2023 he will be able to command an increase in his salary -- either from his current
employer or another employer -- as a direct result of the MSIT Program.
Assume that Bradley requires a rate of return on his investment of 8.5% per annum and that his first salary
increase resulting from his degree will take place in October 2023. Also assume that Bradley expects a
3.5% annual increase in his salary throughout his career and that he will receive thirty-eight annual
paychecks after graduation, the first of which will be in October 2023.
By how much must Bradley's salary increase in October 2023 to justify his outlays for tuition?
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