A store offers two payment plans. Under the installment plan, you pay 20% down and 20% of the purchase price in each of the next 3years. If you pay the entire bill immediately, you can take a 10% discount from the purchase price.a. Which is the better deal if the interest rate is 6.0%?Installment PlanO Immediate Planb. How will your answer change if the four payments on the instalments do not start until the end of the year?O Installment PlanO Immediate Plan

First we need to calculate, present value of future payment by using this equation PV =FV(1+i)n…

Answered: A store offers two payment plans. Under…

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

The bank is offering you 9 APR on a loan. Currently the conditions are that the 9 APR is compounded monthly. Say the bank was open to changing the compounding period to anything you would like.... b) What is the BEST-case scenario for your ieff (annual) as far as you (the customer) is concerned? Type your response
The bank offers you the following three options to pay back the loan from the previous question: I: To pay the interest of 6.00% annually II: To pay an interest of 0.49% monthly III: To pay an interest of 1.46% quarterly Which of these three options would be most beneficial for you? O All three options would be equally beneficial Option II ○ Option III Option I O Option II and Option III would be equally beneficial
Assume you plan to borrow $400,000 from your bank to buy a home. The bank offers: a 5-year fixed rate of 6.05 %, compounded monthly. a 3-year fixed rate of 5.75 %, compounded monthly. If you choose to repay the borrowing in equal installments monthly over a 20 years, what would be the difference between your monthly payments at the two different APRs? a. $68.94 b. $154.58 c. $26.98 d. $89.32
Assume you need a $87,000.00 loan for a home. Compute the monthly payment for each option. Assume that the loans are fixed rate and that closing costs are the same in both cases. Round to the nearest penny.Option 1: a 30 year-loan at an APR of 7.25%The monthly payment for Option 1 would be $.Option 2: a 15 year-loan at an APR of 6.5%The monthly payment for Option 2 would be $
Suppose that your unsubsidized Stafford loans plus accumulated interest total $22000 at the time you start repayment, the interest rate is 9%APR, and you elect the standard repayment plan of a fixed amount each month for 10 years. What is your monthly repayment? How much will you pay in interest?
A lender has offered to finance the purchase at the following terms: 60% Loan-to-Value 5% Interest Rate, Interest-only payments for 10 years What is your Year 1 Cash-on-Cash Return?
You want to buy a bus. Cost is $180,000 with 10% down and the rest in 7 equal annual payments which include interest at 6%. The payments begin in one year. How much are the payments? Amortize the loan. Record the Journal Enteries.
Find the monthly payment for the 15- year option.
When purchasing a $100,000 house, a borrower is comparing two loan alternatives. The first loan is an 80% loan at 4% with monthly payments of $591.75 for 15 years. The second loan is 90% loan at 5% with monthly payments of $526.13 over 25 years. What is the incremental cost of borrowing the extra money assuming the loan will be held for the full term? O 6.50% O 13.21% O 7.20% O 13.70%

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