Chuck Wells is planning to buy a Winnebago motor home. The listed price is $185,000. Chuck can get a secured add-on interest loan from his bank at 7.35% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,300 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 $4,300? 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.) O try to negotiate a higher interest rate O make a higher down payment O make a lower down payment O try to bargain for a higher sale price O try to negotiate a lower Interest rate O 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.)
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $185,000. Chuck can get a secured add-on interest loan from his bank at 7.35% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,300 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 $4,300? 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.) O try to negotiate a higher interest rate O make a higher down payment O make a lower down payment O try to bargain for a higher sale price O try to negotiate a lower Interest rate O 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.)
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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![### Motor Home Payment Planning
**Scenario:**
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $185,000. Chuck can get a secured add-on interest loan from his bank at 7.35% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,300 per month and amortize the loan in 42 months.
#### Problem Statements:
1. **Find Chuck’s Monthly Payment:**
Calculate Chuck’s monthly payment (in $) with these conditions. (Round your answer to the nearest cent.)
```Input Box: $ _____ ```
**Question:**
Can he pay off the loan and keep his payments under $4,300?
- Yes, under these conditions, Chuck will meet his goal.
- No, the monthly payment is too high.
2. **Options to Get Closer to the Goal:**
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 higher down payment
- [ ] Make a lower down payment
- [ ] Try to bargain for a higher sale price
- [ ] Try to negotiate a lower interest rate
- [ ] Try to bargain for a lower sale price
3. **Alternative Loan Financing:**
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.)
```Input Box: $ _____ ```
**Question:**
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.
4. **Further Payment Reduction:**
Attempting to reduce his monthly payment further, Chuck continues to negotiate with the seller. If the seller agrees to reduce the listed price by $4,800, 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.)
```Input Box:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3617c55e-3ffd-440c-a48a-0bb5a707f12c%2F121bc27a-f4f9-42e3-bfa7-9f933eb6f3a4%2F1ako38k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Motor Home Payment Planning
**Scenario:**
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $185,000. Chuck can get a secured add-on interest loan from his bank at 7.35% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,300 per month and amortize the loan in 42 months.
#### Problem Statements:
1. **Find Chuck’s Monthly Payment:**
Calculate Chuck’s monthly payment (in $) with these conditions. (Round your answer to the nearest cent.)
```Input Box: $ _____ ```
**Question:**
Can he pay off the loan and keep his payments under $4,300?
- Yes, under these conditions, Chuck will meet his goal.
- No, the monthly payment is too high.
2. **Options to Get Closer to the Goal:**
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 higher down payment
- [ ] Make a lower down payment
- [ ] Try to bargain for a higher sale price
- [ ] Try to negotiate a lower interest rate
- [ ] Try to bargain for a lower sale price
3. **Alternative Loan Financing:**
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.)
```Input Box: $ _____ ```
**Question:**
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.
4. **Further Payment Reduction:**
Attempting to reduce his monthly payment further, Chuck continues to negotiate with the seller. If the seller agrees to reduce the listed price by $4,800, 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.)
```Input Box:
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