Jessie is considering purchasing a new car for $30,000. The dealer is offering 2 options on the purchase: Option 1. Receive a $5,000 rebate on the price of the car and finance the balance over 5 years at 4% interest. or Option 2. Finance the vehicle for 6 years at 0% interest but no interest.   Question: What is the the monthly payment that Jessie has to pay for option 1? Question: What is the total cost of the cash rebate option (option 1)? Question: What is the the monthly payment that Jessie has to pay for option 2? Question: Which option would you recommend? Why?

Q: ndre’s friend and is impressed by the new car. As such Walter thinks it’s a good time for a new car…

A: Loans make purchase of vehicle very easy because you pay down payment and remaining you pay by the…

Q: Rich buys a car for $34,000 and has two options for financing. The dealership offers either…

A: Time value of money :— According to this concept, value of present money is greater than the value…

Q: Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him…

A: The term "present value" (PV) refers to the value at the current time of a quantity of money or…

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A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount…

Q: Tim wants to buy a new boat for &9,500. If the store is going to charge Tim 8% annual interest on…

A: in this we have to calculate total interest to be paid and total principal and then monthly payment.

Q: While buying a new car, Monica made a down payment of $900 and agreed to make month-end payments of…

A: Down payment (D) = $900 Month end payment (m) = $240 Monthly period of repayment (p) = 56 (i.e. 4…

Q: Tony is purchasing a new car for 23,000. The tax is 7% of the purchase price and the dealership fee…

A: A loan refers to a contract between two parties where money is forwarded in exchange for a promise…

Q: Tracy wants to buy a new car. She is provided with two options by the dealership: $6,000 cash back…

A: Cash value of car = $50,000Alternative 1: Getting CashbackIf Tracy wants to opt for cashback, she…

Q: Josh wants to borrow money for a kitchen renovation. He has saved $2500 already but the cost…

A: Loan refers to an amount that is taken by the borrower from the lender whose repayment is to eb…

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

A: The present value of the given annuity: The present value of the annuity due in the future is the…

Q: Erika is weighing her options for transportation.  She’s narrowed them down to the following: Option…

A: Therefore, the monthly payment for option A is $314.71.

Q: Patricia finances a $49,100 car with annual payments at a 3.10% interest rate over 8 years, at which…

A: Annuity means where regular payment is made at the end of regular period. When loan is taken , we…

Q: Option Rex and Bonnie are wanting to buy a new entertainment couch with a sales price of $20,000 for…

A: For Option 1, we are given that the interest is computed using the simple interest method. The…

Q: 1. Melissa wants to buy a new stereo system for $850 at Surround Sound City. Surround Sound City…

A: Dear student this a simple interest problem, where you need to fill the above table with the help of…

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: Maria purchases a new big screen television for $850 on her VISA card that carries a favorable…

A: Formulas:

Q: Your are in need of cash and turn to your cousin, who offered to lend you some money. You decide to…

A: The rate of interest charged by the cousin is calculated using the following equationWhere, FV is…

Q: The effective interest rate to the nearest percent for the financing arrangement for the five annual…

A: The effective rate of interest, also known as the effective annual rate (EAR) or annual equivalent…

Q: Andy wants to buy a car that costs $22,750. The dealership will finance the car for 5 years, at…

A: A loan is an agreement where an amount is forwarded in exchange for a periodic payment which would…

Q: While buying a new car, Alexis made a down payment of $1,200 and agreed to make month - end payments…

A:

Q: Hector and Maria purchase their first home for $138,000. They make a 10% down payment and finance…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Sonia buys a house for $250,000. she makes a down payment of 15% of the purchase price and takes a…

A: Cost of house = $ 250,000 Down payment = 15%

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A: Present value is the estimation of the current value of future cash value which is likely to be…

Q: While buying a new car, a down payment of $1,20 agreed to make month-e of $300.00 for the next 4…

A: Vehicle are purchased by paying by small amount of down payments and remaining payments are made by…

Q: рауm parents agree to lend her money at an annual rate of 5%, charged as sir interest. They lend her…

A: Simple interest is plain simple and there is no interest on interest and so there is no compounding…

Q: Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him…

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

Q: Emily received a 25 year loan of $295,000 to purchase a house. The interest rate on the loan was…

A: Mortgage loans are paid with equal and fixed monthly payments that include both the payment for…

Q: enny purchase a house for a selling price of 310,000 and need to make a 15% down payment. The…

A: Loans are paid by the monthly payments these are equal monthly payments that carry the payment for…

Q: sky wants to purchase a new house that cost 1,440,000. The bank agrees to provide a loan to fixed…

A: We need to find monthly installment and compare that with the salary of 20000 per month. If monthly…

Q: Michaela buys a new car for $31,600. The simple interest rate is 5.6% and the amount of loan…

A: In simple interest there is interest on the principal amount only and no interest on interest in…

Q: You decide to do some remodeling in the kitchen. Your parents agree to lend you the money, but you…

A: Simple interest is calculated by multiplying borrowed amount , interest rate and time.   Simple…

Q: Option Rex and Bonnie are wanting to buy a new entertainment couch with a sales price of $20,000 for…

A: For Option 1, we are given that the interest is computed using the simple interest method. The…

Q: A. If i buy a car from a dealership for $27000 with 2.5% paying monthly for a total of 3 years how…

A: Future value :— It is the value of present money in the future date.    Future value = Present Value…

Q: She will owe $____ on the car immediately following the 18th payment. A. 18,858.19 B. 18,531.57…

A: Monthly payments refer to the set sum of money that a borrower must pay back on a loan each month.…

Q: Lisa Camry bought a $15,000 car with a $3,000 down payment. The balanceis financed by a…

A: WACC stands for the weighted average cost of capital. It is the rate that a company is ready to pay…

Q: Jane agrees to buy a car for a down payment of $8000 and payments of $360 per month for 9 years. If…

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

Q: Todd is able to pay $360 a month for 6 years to finance a car purchase.  a. If the interest rate is…

A: Per month payment=$360Number of months=6×12=72Rate per month=6% compounded monthly

Q: Ann Is buying a new home for $365,000.  She is choosing between 2 loan options. Loan A is a 15-year…

A: Data given Particulars Loan amount ($) Monthly rate N (years) Period Monthly payment ($) Loan A…

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.