Compute the monthly payment and the total amount spent for a vehicle that costs $24,000 if you finance the entire purchase over 5 years at an annual rate of 8 25 percent. Calculate the payment if you finance the car for only four years. Finally, calculate the payment for three years. What do you notice about the payment under the different time assumptions? Note: Round intermediate computations to at least five (5) decimal places Click on the table icon to view the MILPF table The monthly payment, PMT, on the 5-year auto loan is $ (Round to the nearest cent.) The total amount spent if you financed $24,000 for 5 years at 8 25 percent per year is $ (Round to the nearest cent.) The monthly payment, PMT, on the 4-year auto loan is $ (Round to the nearest cent.) Finally, the monthly payment, PMT, on the 3-year auto loan is $ (Round to the nearest cent.) What do you notice about the payment under the different time assumptions? (Select the best choice below) OA. As the number of payments decreases, the monthly payment increases, all else equal. The shorter the borrowing period, the higher the monthly payments. OB. As the number of payments decreases, the monthly payment decreases, all else equal. The shorter the borrowing period, the lower the monthly payments
Compute the monthly payment and the total amount spent for a vehicle that costs $24,000 if you finance the entire purchase over 5 years at an annual rate of 8 25 percent. Calculate the payment if you finance the car for only four years. Finally, calculate the payment for three years. What do you notice about the payment under the different time assumptions? Note: Round intermediate computations to at least five (5) decimal places Click on the table icon to view the MILPF table The monthly payment, PMT, on the 5-year auto loan is $ (Round to the nearest cent.) The total amount spent if you financed $24,000 for 5 years at 8 25 percent per year is $ (Round to the nearest cent.) The monthly payment, PMT, on the 4-year auto loan is $ (Round to the nearest cent.) Finally, the monthly payment, PMT, on the 3-year auto loan is $ (Round to the nearest cent.) What do you notice about the payment under the different time assumptions? (Select the best choice below) OA. As the number of payments decreases, the monthly payment increases, all else equal. The shorter the borrowing period, the higher the monthly payments. OB. As the number of payments decreases, the monthly payment decreases, all else equal. The shorter the borrowing period, the lower the monthly payments
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:Compute the monthly payment and the total amount spent for a vehicle that costs $24,000 if you finance the entire
purchase over 5 years at an annual rate of 8 25 percent. Calculate the payment if you finance the car for only four
years. Finally, calculate the payment for three years. What do you notice about the payment under the different
time assumptions?
Note: Round intermediate computations to at least five (5) decimal places
Click on the table icon to view the MILPF table
The monthly payment, PMT, on the 5-year auto loan is $
(Round to the nearest cent.)
The total amount spent if you financed $24,000 for 5 years at 8 25 percent per year is $ (Round to the
nearest cent.)
The monthly payment, PMT, on the 4-year auto loan is $
(Round to the nearest cent.)
Finally, the monthly payment, PMT, on the 3-year auto loan is $ (Round to the nearest cent.)
What do you notice about the payment under the different time assumptions? (Select the best choice below.)
OA. As the number of payments decreases, the monthly payment increases, all else equal. The shorter the
borrowing period, the higher the monthly payments
OB. As the number of payments decreases, the monthly payment decreases, all else equal. The shorter the
borrowing period, the lower the monthly payments.
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