Barry Wood wants to buy a used car that costs $5000. He has two possible loans in mind. One loan is through the car dealer; it is a three-year add-on interest loan at 6% andrequires a down payment of $300. The second is through his credit union; it is a three-year simple interest amortized loan at 7.5% and requires a 10% down payment.(a) Find the monthly payment for each loan. (Give your answer to the nearest cent.)Dealer$Credit Union $(b) Find the total interest paid for each loan. (Give your answer to the nearest cent.)Dealer$Credit Union $

According to the given information, find the following monthly payment and total interest paid.

Answered: Barry Wood wants to buy a used car that…

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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You have decided to purchase a new car that costs $44,500. You need to make a 20% down payment, then you will finance the rest with a loan. Your bank will extend you a car loan where the APR is 4.32% and you will make monthly payments over five years. What is the monthly payment on the vehicle? O $593.33 O $660.78 O $512.79 O $825.98
Rick wishes to purchase a new car and can afford monthly payments of up to $275 per month. Finance is available and the terms are that the loan lasts for 6 years, and the annual interest rate is 8%. What is the maximum price for a car that Ryan's budget can afford?Round your answer to the nearest hundred dollars.
Jonathan wishes to buy a used chevy malibu for $12,500. He only has $1,000 for a down payment so th ebest deal he can get on a loan is 9% for 48 months a.) what will his payments be? b.)What is the total interest over the life of the loan?
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $175,000. Chuck can get a secured add-on interest loan from his bank at 7.45% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,100 per month and amortize the loan in 42 months. (a) Find Chuck's monthly payment (in $) with these conditions. (Round your answer to the nearest cent.) $ Can he pay off the loan and keep his payments under $4,100? Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high. (b) What are Chuck's options to get his payments closer to his goal? (Select all that apply.) try to negotiate a higher interest ratetry to bargain for a lower sale pricetry to negotiate a lower interest ratemake a lower down paymenttry to bargain for a higher sale pricemake a higher down payment (c) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.85% loan if Chuck can pay 20% down. What…
4) Brenda is buying a living room set for her home. At Furniture, Inc., she picks out a set for a total cash price of $1,899 The salesperson tells her if she qualifies for an installment loan, she may pay 10% down and finance the balance with payments of $88.35 per month for 24 months?
Arnold has determined that he can afford a monthly payment of $325 for a car. If he can obtain a 4 year car loan at an annual interest rate of 3.1%, what is the maximum amount (in dollars) he can finance? Round your answer to the nearest cent.
Tom needs a car to commute to work and has found a suitable Honda Civic from a dealer for $8000. He has $3000 saved for it and can afford a monthly payment up to $250. Which of the following is the best (lowest total cost) financing option for him? O a. Make a $3000 deposit and take a two year loan with monthly payments of $221. O b. Make a $2000 deposit and take a three year loan with monthly payments of $185. O c. Make a $2500 deposit and take a two year loan with monthly payments of $241. O d. Make a $1000 deposit and take a three year loan with monthly payments of $210.
Judy has $2,000 for a down payment
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $155,000. Chuck can get a secured add-on interest loan from his bank at 7.45% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $3,600 per month and amortize the loan in 42 months. (a) Find Chuck's monthly payment (in $) with these conditions. (Round your answer to the nearest cent.) $ Can he pay off the loan and keep his payments under $3,600? Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high. (b) What are Chuck's options to get his payments closer to his goal? (Select all that apply.) try to negotiate a lower interest ratemake a higher down paymenttry to bargain for a higher sale pricetry to bargain for a lower sale pricemake a lower down paymenttry to negotiate a higher interest rate (c) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.95% loan if Chuck can pay 20% down. What…
Kat is looking to but her first car. She has figured that she can afford to make up to a $388 monthly payment to the bank for a car loan. She plans to pay off the car loan in 5 years and the bank is willing to give her a 6% interest rate, compounded monthly. What is the maximum amount she can borrow to purchase a car? (How expensive of a car can she afford) Round to the dollar $
** HINT: Look online or look back at your worksheets for "add- on interest" problems! Melanie bought a used car for $10,000. (S)he put $100 down and financed the balance with the dealer at 5% add-on interest. If they agreed to make 36 monthly payments, then: (Round each answer to the nearest penny) What is the total payback amount of the loan? $ What is the amount of each payment? $ /month What is the total amount of interest paid on the loan? $

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