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? O Yes, under these conditions, Chuck will meet his goal. O 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 rate Omake a lower down payment try to bargain for a higher sale price Omake a higher down payment try to negotiate a lower interest rate try to bargain for a lower sale price (c) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.85% loan 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? O Yes, under these conditions, Chuck will meet his goal. O 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 6.85% 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? O Yes, under these conditions, Chuck will meet his goal. O No, the monthly payment is too high.
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? O Yes, under these conditions, Chuck will meet his goal. O 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 rate Omake a lower down payment try to bargain for a higher sale price Omake a higher down payment try to negotiate a lower interest rate try to bargain for a lower sale price (c) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.85% loan 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? O Yes, under these conditions, Chuck will meet his goal. O 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 6.85% 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? O Yes, under these conditions, Chuck will meet his goal. O 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
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Transcribed Image Text: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 rate
make a lower down payment
try to bargain for a higher sale price
make a higher down payment
try to negotiate a lower interest rate
try to bargain for a lower sale price
(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 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 6.85% 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.
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