A used car with $5,000.00 cash price may be purchased by making payments of $275.00 to be made at thebeginning of every month for 20 months. What nominal rate of interest, compounded monthly, is charged?

Therefore, the nominal interest rate charged is approximately 6.17% per year.Explanation:Calculate…

Answered: A used car with $5,000.00 cash price…

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

See similar textbooks

Similar questions

A car loan of $22989 is to be repaid by making payments each month for 6 years. If interest is 9% compounded monthly, how much is our monthly car payment?
You can buy a car for $6,998 with $798 down and payments of $164.51 each month for 48 months. what's the amount of interest, interest rate (rounded to two decimal places) and the APR (rounded to the nearest 10th of a percent)
A car dealer will sell you a used car for $6798 with $798 down and payments of $162.51 per month for 47 month for 48 months. What is the simple interest rate ?
You are considering the purchase of a $54,000 Ford F-150 Raptor. If you are financing the truck for 60 months and the auto loan annual rate is 3.5%, what is your monthly car payment? (Round your answer to the nearest hundredth; two decimal places) Your Answer: Answer
The price of a new car is $36,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 9% / year compounded monthly. (Round your answers to the nearest cent.) (a) What monthly payment will she be required to make if the car is financed over a period of 36 months? Over a period of 72 months? 36 months. $ 72 months $ (b) What will the interest charges be if she elects the 36-month plan? The 72-month plan? 36-month plan $ 72-month plan $
Manjean is making car payments of $662 per month for the next 3 years. Manjean knows that the car loan has an interest rate of 11.5%, discounted monthly, what was the initial price of the car? Note: Final answer round to the nearest whole number. No need put UOM (unit of measure).
Assume the car can be purchased for 0% down for 60 months (in lieu of rebate). A car with a sticker price of $36,500 with factory and dealer rebates of $4,200 (a) Find the monthly payment if financed for 60 months at 0% APR. (Round your answer to the nearest cent.)$ (b) Find the monthly payment if financed at 2.5% add-on interest for 60 months. (Round your answer to the nearest cent.)$ (c) Use the APR approximation formula to find the APR for part (b). (Round your answer to one decimal place.)%(d) State whether the 0% APR or the 2.5% add-on rate should be preferred.
A car loan is taken for $22,000 to be paid back in 5 years, with monthly payments of $457. What nominal annual interest rate is being charged in this loan? 10.99% 9.00% 1.25% 0.75%
A car is to be purchased in monthly payments of P19,500 for 5 years starting at the end of 3 months. How much is the cash value of the car if the interest rate used is 10% converted monthly?
What is the monthly car payment on a 5 year $17,500 car loan at 5% annual interest?
Assume the car can be purchased for 0% down for 60 months (in lieu of rebate). A car with a sticker price of $42,100 with factory and dealer rebates of $5,100. Hint: See Section 11.2, Example 5. (a) Find the monthly payment if financed for 60 months at 0% APR. (Round your answer to the nearest cent.)$ (b) Find the monthly payment if financed at 2.5% add-on interest for 60 months. (Round your answer to the nearest cent.)$ (c) Use the APR approximation formula to find the APR for part (b). (Round your answer to one decimal place.) %(d) State whether the 0% APR or the 2.5% add-on rate should be preferred. 0% APR2.5% add-on rate
A Honda Civic Type R retails for $27,191 (all taxes included). What are the monthly loan payments for the car if you make a down payment of $4,422, the term is 4 years and the APR is 2%? (Car loan payments are made at the end of each month.) What is the amount of the monthly payment? $ (Type a number to the nearest cent.) ...

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS

A used car with $5,000.00 cash price may be purchased by making payments of $275.00 to be made at the beginning of every month for 20 months. What nominal rate of interest, compounded monthly, is charged?