It is estimated that the maintenance cost on a new car will be $350 the first year. Each subsequent year, this cost is expected to increase by $250. How much would you need to set aside when you bought a new car to pay all future maintenance costs if you planned to keep the vehicle for 15 years? Assume interest is 6% per year.

Q: You wish to purchase a home for $500,000. You will make payments of $30,000 at the end of every…

A: A sum borrowed to meet specific personal or business funding needs is recognized as a loan/mortgage.…

Q: A Chevrolet Sonic Hatchback costs $14,375.00. With a 7% down payment, you can have an amortized loan…

A: Initial cost of car = $14,375 Down payment = initial cost of car * 7% = 14,375 * 0.07 = $1006.25…

Q: are forecasting the amount of plane tickets. Based on your study, it is likely that airplane tickets…

A: The price of tickets increases with time and money required today would be the present value of…

Q: You are deciding to buy a car to commute to work given the comparatively low interest of 6% per…

A: A loan is a debt arrangement that provides financial assistance to a person to full fill a specific…

Q: you are saving money to buy a car. if you save $290 per month starting one month from now at an…

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: what is the largest down payment you can make at the end of three years (immediately after the last…

A: Value at the end of saving period comprises of monthly saving and interest on those savings.…

Q: In order to be able to buy the new machine, you take a loan of 2 million from the bank, which you…

A: Amortized loan: An amortized loan is a case of the present value of an ordinary annuity.The PV of an…

Q: You decide to buy a house costing $5,000,000. You pay $1,000,000 down, and the remainder will be…

A: A home equity loan is a loan provided against the equity of a property. The equity value at any…

Q: A house and lot is to be purchased by paying 35,000 pesos monthly for 25 years. The first payment is…

A: The question is related to Cash price of the house and lot if interest rate is 12% converted…

Q: Should you buy an asset that will generate income of $1,000 per year for 10 years? The price of the…

A: YEAR CASH FLOW      0 -7500 1 1000 2 1000 3 1000 4 1000 5 1000 6 1000 7 1000 8…

Q: How much must you save each year

A: The worth of today’s dollar at a future date is the future value of the dollar. For example, the…

Q: You want to buy a boat costing $35,000.  Your down payment is $7,000.  The remainder will be paid…

A: We have to calculate present value factor by considering monthly interest and from that we can…

Q: How much was initially invested if the value of the investment is at P200,000 after 3 and a half…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

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A: A loan refers to a contract between a borrower and a lender where a sum is exchanged on the promise…

Q: A year from now, you wish to buy a scooter motorcycle with a projected cost of Php70,000. To save up…

A: PMT is the periodic installment.

Q: The monthly rent for the first house is $1, 190, and the Bainters can expect it to increase 1.7%…

A:

Q: A company plans to buy new equipment in 25 years. They will start by saving $1,370 at the end of…

A: Saving at the end of year = $ 1370 Annual growth rate = 3.5% Annual interest rate = 15.3% Period =…

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A: Present value is the current value of a future amount that is to be received or paid out.     Future…

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A: Hi, since you have posted multiple questions, we will answer the first one, as per authoring…

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

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A: A series of equal cashflows for a certain number of periods at equal time interval can be defined as…

Q: You expect that you will need to replace your furnace in 4 years at a cost of $15,228. How much must…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

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Q: How much will you pay for a $10,000 automobile in 20 years if the infla-tion rate averages 3 percent…

A: Information Provided: Present amount = $10,000 Term = 20 years Inflation rate = 3%

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A: Solution:- When an amount is invested in a bank, it earns interest on it. With rise of inflation,…

Q: NPV

A: Formula to calculate the NPV is: NPV = Cash flows/(1+i)^n - Initial investment

Q: You have just leased a car that has monthly payments of $390 for the next 3 years with the first…

A: For the calculation of the present value we will use the below formula.Present value =…

Q: It is likely that plane tickets will increase 6.5% in each of the next three years. The cost of the…

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Q: You want to buy a $20,000 car. The company is offering a 2% interest rate for 60 months (5 years).…

A: Variables in the question:PV=Loan amount=$20000Rate=2%N=5 years

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Q: By the end of five years, you want to save a down payment amount of $25,000 in order to purchase a…

A: The upfront payment made to purchase any personal asset on a loan is regarded as the down payment.…

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A: Present value of annuity is the current worth of future annual cash flows over a period of time at a…

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A: In this question we need to compute the number of years i.e. time period.This question is based on…

Q: The cost of a new automobile is $12,000. If the interest rate is 4%, how much would you have to set…

A: An annuity is a phenomenon of investing money on a regular basis at a specified interest rate for a…

Q: You estimate your monthly gas and maintenance expenses for your delivery vehicles will be $1,500 a…

A: Monthly expenses (P) = $ 1500 Period = 7 Years Period in months (N) = 7*12 = 84 Annual interest rate…

Q: If you are considering the purchase of a consol that pays $60 per year forever, and the rate of…

A: PERPETUITY : IT IS ANNUITY WHICH IS PAID FOREVER. PV =ar where, a=annual payment r= rate

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A: The time value of money concept asserts that an amount of money is worth more now than it would be…

Q: Unfortunately it costs $25,000, it you want to the purchases the car in five years and in the…

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Q: I purchased a house and intend to hold the property indefinitely. I plan to rent the house to…

A: Following are the given details: First year's rent= $15000 Initial Growth Rate = 10% Stable Growth…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.