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 will Chuck's new monthly payment (in $) be with these conditions? (Round your answer to the nearest cent.) $ With these conditions, will Chuck be able to pay off the loan and meet his goals? Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high
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 will Chuck's new monthly payment (in $) be with these conditions? (Round your answer to the nearest cent.) $ With these conditions, will Chuck be able to pay off the loan and meet his goals? Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high
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
Related questions
Question
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 will Chuck's new monthly payment (in $) be with these conditions? (Round your answer to the nearest cent.)
$
With these conditions, will Chuck be able to pay off the loan and meet his goals?
Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high.
(d)
Attempting to reduce his monthly payment further, Chuck continues to negotiate with the seller. If the seller agrees to reduce the listed price by $4,600, finance the deal with a 6.95% loan, and if Chuck pays the 20% down, what will Chuck's monthly payment be (in $)? (Round your answer to the nearest cent.)
$
With these conditions, will Chuck be able to pay off the loan and meet his goal?
Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
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