Dolph can afford a monthly car payment of $418 for the next 5 years, with the first payment occurring one month from today. If the annualized interest rate for car loans is 8%, what is the maximum amount he borrow to purchase a car? Enter a positive number as your answer and round to the nearest dollar.

Q: Ingrid wants to buy a $22,000 car in 7 years. How much money must she deposit at the end of each…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: Roger has found a home to be purchase for $219,626 and has agreed to pay 30% down. Find the amount…

A: Annuity refers to series of annual payment which are paid or received at start or end of specific…

Q: Kaitlin wants to save money to purchase a car. She buys an annuity with yearly payments that earn…

A: FV of an annuity is that amount which is the value of total periodic amounts in the future. FV =…

Q: Greg wants to buy a $25,000 car today, but he doesn’t have the cash to buy it. The dealership is…

A: Loans are paid by equal monthly fixed types of payments and these payments carry the payment of…

Q: Sue obtains a one-year loan of $2,700 based on an interest rate of 10 percent compounded annually…

A: Compound = monthly = 12Time = t = 1 * 12 = 12Present Value = pv = $2700Interest rate = r = 10/12%

Q: A friend of yours tells you she holds an American call option that is very deep- in-the-money. She…

A: Deep in the money is an option where the exercise price is significantly lower than the current…

Q: Jim has an annual income of $300,000. Jim is looking to buy a house with monthly property taxes of…

A: Here, To Find: Maximum monthly mortgage payment =?

Q: 2. Andy is planning to buy a car when he graduates from college 4 years from now. The estimated…

A: One-time simple interest is often used for very relatively brief loans. Interest is often…

Q: Tian can afford to put a down payment of $10,000 on a car. He can also afford to make monthly…

A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…

Q: Todd can afford to pay $390 per month for the next 7 years in order to purchase a new car. The…

A: Present Value is the current price of future value which will be received in near future at some…

Q: Pete Leary wants to attend College. Seven years from today he will need $30,000. If Pete's bank pays…

A: Present value refers to the current amount of the future payment in a specified period of time. It…

Q: Suppose Dina is choosing how to allocate her portfolio between two asset classes: risk-free…

A: Here,CombinationFraction of Portfolio in Diversified Stocks (%)Average Annual Return (%)Standard…

Q: Dan is contemplating trading in his car for a new one. He can afford a monthly payment of at most…

A: Amount received for trade-in = $6,000  Monthly Payment, P = $500  Interest rate = 2.2%  Number of…

Q: Craig decides to purchase a property that has been valued at $475,000. He has $80,000 available as a…

A: Value of property = $475,000Available deposit = 80,000Mortgage year = 25 yearsInterest = 2%

Q: Rasheed can afford a monthly car payment of $550 for 72 months at an annual interest rate of 7.5…

A: Present value of annuity formula.PV = A * wherePV = Present value of annuityA = periodic paymentsr =…

Q: Ingrid wants to buy a $22,000 car in 7 years. How much money must she deposit at the end of each…

A: A sinking fund is a type of fund that is set up by an organization or company to accumulate money…

Q: Ingrid wants to buy a $22,000 car in 6 years. How much money must she deposit at the end of each…

A: Future Value = $22,000 Time Period = 6 Years Interest Rate = 5.8%

Q: Maeve wants to borrow money to purchase a car.  They can afford to pay back $200 a month.  If they…

A: Annuity refers to series of annual payment which are paid or received at start or end of specific…

Q: If Sandy can afford car payments of $320 per month for 7 years, what is the price of a car that she…

A: A series of equal payments at regular intervals over a period of time is called an annuity. If the…

Q: Nadia needs to borrow $5000 to pay for ocean cruise tickets for her family. She can borrow from a…

A: APR stands for Annual Percentage Rate. It is a standardized way of expressing the total cost of…

Q: Lisa has another option for her plan to buy a new house: Using $150,000 as a deposit and get a…

A: Compounding is an important technique which increases the effective interest rate. Effective…

Q: After starting your full - time job out of college, you decide to buy a new car for $85,000. Create…

A: Car cost = $85,000Number of payments = 84Discount rate = 6.5%To find: Amount owed after the 75th…

Q: Joe secured a loan of $15,000 two years ago from a bank for use toward his college expenses. The…

A: Monthly payment The minimum value that is required to be paid each month by an individual for the…

Q: Jonathon wishes to buy a used Chevy Malibu for $12,500. He only has $1,000 for a down payment so the…

A: Computation as follows: Therefore, the payment amount and total interests are $286.18 per month and…

Q: Zoey Bettincourt gets a $300,000 loan for a townhouse. She secures a 5/1 ARM at an initial interest…

A: Loan amount = $300,000 Initial interest rate = 2.75% Initial payment = $1,224.72 After 5 years,…

Q: Bob can afford car payments of $365 per month for 4 years. If the interest rate is 4.9 percent, how…

A: Amount he can afford to borrow is present value of monthly payments

Q: Ingrid wants to buy a $17,000 car in 8 years. How much money must she deposit at the end of each…

A: The FV of an investment refers to the combined value of the cash flows of the investment at a…

Q: Derek decides to buy a new car. The dealership offers him a choice of paying $588.00 per month for 5…

A: A purchase can be made by paying in cash or paying in installments.

Q: at minimum down payment must Asher make to keep his monthly payment at or below $500? und your…

A: Monthly payment of loan includes the payment of principal and interest payment that goes on changing…

Q: Dave wants to buy a $25,000 car by making a 10% down payment and financing the rest for five years.…

A: Down payment is defined as an initial partial payment at the time of purchasing an expensive items…

Q: Lucky Louie wants to buy a car that costs $26,750. The interest rate on his loan is 5.33 percent…

A: Car cost = 26750 Interest on loan = 5.33% Years = 7 Compounded = Monthly  PMT find out using Excel:…

Q: If Sam can afford payments at $390 per month for 6years. what is the price of a car that she can…

A: Here, Monthly Payment (PMT) is $390 Time Period (n) is 6 years Interest Rate (r) is 6.6% Payment…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.