Jackson wants to buy a Corolla Cross 1.8 Hybrid by means of a financing plan. Th price is R481 700. GL Finance, a vehicle finance company, will finance 70% of the purchase price over a period of three years at a nominal interest rate of 14% per year (NACM). Instalments are payable in advance. What is the monthly instalment (Report answer in absolute terms)?

Jackson wants to buy a Corolla Cross 1.8 Hybrid by means of a financing plan. Th price is R481 700. GL Finance, a vehicle finance company, will finance 70% of the purchase price over a period of three years at a nominal interest rate of 14% per year (NACM). Instalments are payable in advance. What is the monthly instalment (Report answer in absolute terms)?

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

See similar textbooks

Related questions

Q: Asset XYZ is selling for $200 in the cash market. Asset XYZ pays the holder $16 per year in…

A: Selling price or Spot price(S) is $200 Dividend Per year is $16, 3 month interest rate(r) is 6% per…

Q: Schoene Lighting Company is borrowing 2 million. The loan will be repaid in equal quarterly…

A: Here,Loan amount = $2,000,000Interest rate = 9%Number of years = 3 yearsNumber of compounding…

Q: A company has the following payment options to settle a loan: ■ Option A: To pay $19,000 today, or ■…

A: The question requires us to suggest a better payment option to settle the loan among the 2 given…

Q: A bank is offering to pay you $1000 at the beginning of each month for the next 10 years. The…

A: Payment per month (PMT) = $1,000Timing = BeginningAnnual interest rate is 6%. So, monthly interest…

Q: A borrower agrees to repay a loan of £3000 by 15 annual repayments of £500, the first repayment…

A: The annual yield is that rate at which the present value of all repayment is equal to the loan…

Q: Your business requests a 3-month loan for 50,000. What will be the interest paid at the end of the…

A: The amount of interest paid is calculated as shown below.

Q: How much will Kingston Technologies have to pay each year in 7 equal payments, starting 2 years from…

A: No. of equal installments = 7 Loan amount = $900,000 Interest = 14% per annum Annuity calculation is…

Q: You need to borrow $750,000 to purchase a new house. JRE bank will loan you the money at an APR of…

A: Amortization of loan refers to the regular and systematic repayment of the loan amount along with…

Q: A demand loan of $3000.00 is repaid by payments of $1000.00 after two years, $1000.00 after four…

A: Loans are paid by payments and these payments carry the payment for interest and payment for loan…

Q: Your firm is considering two one-year loan options for a $506,000 loan. The first carries fees of…

A: A loan is an agreement where a party forwards a sum to another party in return for that sum being…

Q: Your uncle will sell you his bicycle shop for $255,000, with "seller financing," at a 6.0% nominal…

A: The objective of the question is to calculate the equal monthly payments for a loan of $255,000 with…

Q: An investor is planning to borrow $600,000 from an Australian bank at an annual rate of 4%. Assuming…

A: Loans are paid by equal monthly installments that carry payment for interest and payment for loan…

Q: A $17000 loan is to repaid by monthly payments of $390, the first payment is due in one year's time.…

A: given, pv = $17000 pmt = $390 r=10% m=12

Q: You are buying a house for $280,000.00 with a downpayment of $56,000.00. The loan will be paid back…

A: Loan amount = Cost of House - Downpayment To calculate the concluding amount of loan, excel formula…

Q: An private firm can buy a machine for $ 40,000. A down payment of $ 4,000 is required and the…

A: The annual equivalency method is used to compare the two similar projects with the unequal term.…

Q: Jane Doe plans to make twelve end-of-month payments of $18,000 each on a short term investment…

A: The time value of money (TVM) is a financial concept that recognizes the idea that money has a…

Q: Boomer Co. offers a financial security that pays $200 annually for 5 years and the market rate is…

A: Payment = p = $200Time = t = 5 YearsMarket Rate = r = 5%PMT=200I=5%N=5Required PV Using PV function…

Q: Suppose Marty borrows $300,000 at 4% for 30 years, monthly payments. The APR on the loan is 4.25%.…

A: Step 1: I/Y=4.25%/12N=12*30PV=300000CPT PMT=$1,475.82 Step 2:PMT=1475.82I/Y=4%/12N=12*30CPT…

Q: A bicycle shop is for sale with a price of $110,000, with "seller financing," at a 6.0% nominal…

A: In the given case, the monthly payments are to be found which can be determined by using following…

Q: A store offers two payment plans. Under the installment plan, you pay 25% down and 25% of the…

A: a-1Present value = Cash flow/(1+interest)^number of years that is present value=

Q: The price of a condominium is $86,000. The bank requires a 5% down payment and one point at the time…

A: Note: As per the policy, we are supposed to solve first three subparts- at a time. Kindly repost the…

Q: The price of a condominium is $175,000.The bank requires a 5% down payment and one point at the…

A: a) Down payment is 5% of the price Answer: down payment is $8,750 b) Amount of the mortgage is…

Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

Jackson wants to buy a Corolla Cross 1.8 Hybrid by means of a financing plan. The
price is R481 700. GL Finance, a vehicle finance company, will finance 70% of the
purchase price over a period of three years at a nominal interest rate of 14% per
year (NACM). Instalments are payable in advance.
What is the monthly instalment (Report answer in absolute terms)?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define=Monthly payments

VIEW

Step 2: Calculation of monthly payment

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

The sales price is $150,000. The buyer is obtaining a 90% conventional loan for 15 years. The factor to amortize a loan of $1,000 at a rate of 7.5% is 9.28. The annual taxes total $1,800 and the annual hazard insurance premium is $600. What is the buyer's monthly payment?
16. You borrow $27,000 to purchase a plane. The loan will be paid in monthly installments over one year at 30% interest annually. The first payment is due one month from today. What is the amount of each monthly payment? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
A loan of $4000 at 6% is compounded semiannually for two years. Find the future value and compound interest. Use the compound interest formula. Click here to view page 1 of the future value table. Click here to view page 2 of the future value table The future value of the loan is $ The compound interest is S (Round to the nearest cent as needed.) (Round to the nearest cent as needed.) 00 future value table or the future value and
Assume you make a single deposit of $1000 into a savings account that pays interest at 0.5% per month. If you want to know how much the accountwill be worth in 5 years, the only values you can use for i and n area. Effective i per month and n = 60b. Effective i per quarter and n = 30c. Effective i per semiannual period and n = 10d. Either (a) or (c)
How much will Kingston Technologies have to pay each year in 9.00 equal payments, starting 2 years from now, to repay a $900,000 loan. The interest rate is 10.00% per year? (Round the final answer to three decimal places.) Kingston Technologies will have to pay $156276.48 each year to repay the loan.
Your uncle will sell you his bicycle shop for $170o,000, with "seller financing," at a 6.0% nominal annual rate. The terms of the loan would require you to make 12 equal end-of-month payments per year for 4 years, and then make an additional final (balloon) payment of $50,000 at the end of the last month. What would your equal monthly payments be? O a. $2,792.07 O b. $3,681.84 C. $3,068.20 O d. $3,129.57 e. $2,362.52
Your friend will sell you his coffee shop for $475,000, with "seller financing," at a 9.0% nominal annual rate. The terms of the loan would require you to make 12 equal end - of -month payments per year for 8 years, and then make an additional final (balloon) payment of $50,000 at the end of the last month. What would your equal monthly payments be? (Do not round intermediate calculations, round your final answer to the nearest cent.)
USE THE PV FUNCTION IN EXCEL !!!! You can buy a car that is advertised for $20,520 on the following terms: (a) pay $20,520 and receive a $5,520 rebate from the manufacturer; (b) pay $570 a month for 3 years for total payments of $20,520, implying zero percent financing. Calculate the present value of the payments for option (a) if the interest rate is 1.25% per month. Calculate the present value of the payments for option (b) if the interest rate is 1.25% per month. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Which is the better deal?
You are considering purchasing an investment contract that will eventually pay you $4,000 per year at the end of each year for seven years. The appropriate interest rate for the risks involved is 6.4% The first payment begins in 6 years. What price should you pay today to purchase this contract (rounded to nearest dollar) ? (Do not round interim calculations)
Your business had to borrow 584, 069.18 to cover some urgent experises. The loan carries an annual interest rate of 15%, and the monthly payment is $2000. How many years will it take to pay off this loan? ROUND YOUR ANSWER TO THE NEAREST WHOLE NUMBER
Teal and Associates needs to borrow $35,000. The best loan they can find is one at 12% that must be repaid in monthly installments over the next years. How much are the monthly payments? (a) State the type. O present value future value O sinking fund O ordinary annuity O amortization (b) Answer the question. (Round your answer to the nearest cent.) $
bipin

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS