esDenzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment options:1. Pay $28,000 today for the car.2. Pay $2,600 at the end of each quarter for three years.Required:1-a. Assuming Denzel uses a discount rate of 12% (or 3% quarterly), calculate the present value.1-b. Which option gives him the lower cost?Complete this question by entering your answers in the tabs below.Req 1AReq 1BAssuming Denzel uses a discount rate of 12% (or 3% quarterly), calculate the present value.Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of $1, PV of $1, FVA of $1,and PVA of $1)Present ValueOption 1Option 2

Present value is the formula used to determine the current value of the money which is expected to…

Answered: Denzel needs a new car. At the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Yuli plans to purchase a vehicle, and she is working with two bank offers. . Bank One Loan Offer: $73,800, 6% annual interest, 60 months. . Bank Two Loan Offer: $73,800, 3% annual interest, 84 months. Yuli's ultimate financial goal is to select the loan with the lowest monthly payment regardless of duration. Based on her financial goal, which loan will Yuli choose? O A. Bank One: Loan Offer O B. Bank Two: Loan Offer OC. Both monthly payments are the same. O D. Not enough information given to answer the question.
Max bought some furniture for his new apartment. Macy's offered him the opportunity to "borrow" the funds using an add-on rate of 8% for 5 years. Payments will be fixed, and payable monthly. The furniture costs $5,250. What is the APR (using the n-ratio formula)?
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% and requires 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 $
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Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment options: 1. Pay $35,000 for the car today. 2. Pay $4,000 at the end of each quarter for three years. Required: 1-a. Assuming Denzel uses a discount rate of 12% (or 3% quarterly), calculate the present value. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.) Present Value Option 1 Option 2 1-b. Which option gives him the lower cost? Option 1 Option 2
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You decide to do some remodeling in the kitchen. Your parents agree to lend you the money, but you insist on paying them interest. The agreement is that they will lend you $8000.00 at a simple interest rate of 2% per year. Once the interest amounts to $480, you agree to pay them back the $8000 plus the $480 interest. After how many months will you have to pay them back? Please answer step by step
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