Part II: Joe and his Dream Porsche Joe is 16 years old and has decided that he wants a brand-spankin' new Porsche Boxter Convertible, but his mom says there's no way that he could ever afford it! So, Joe has decided to show his mom that he will be able to purchase his dream car at the age of 35 if he plans his finances just right. He's asked you to help him plan. A. How much will his car cost in 19 years? The following table shows the approximate MSRP (manufacturers suggested retail price) of a Porsche Boxter Convertible from 2004 to 2008. Create a scatter plot of the data and determine the line of best fit, finding an appropriate slope and initial value assuming it started in 2004.. MSRP Year 2004 $57 510 2005 $59 130 2006 $60 750 2007 $61 965 2008 $63 600 b) find the equation using any formula in detail e) Use your equation to determine the MSRP of a new Porsche Boxster Convertible in the year that Joe turns 35 if he was born in 2000 B. Financing Joe's new Porsche Joe knows that he will have to put 10% down on his car. To save up for this down payment, he plans on investing a set amount monthly, starting now, into Teen's Choice Financial's Interest Plus Savings Account which pays 4% compounded monthly. a) How much will Joe have to put down on his Porsche? b) Using the TVM solver, determine how much Joe must deposit monthly into his savings account to have his down payment by the time he turns 35? c) After his down payment, Joe hopes to finance the rest of the purchase price at 8.2% compounded monthly over 84 months. Using the TVM solver determines Joe's monthly payments. C. Mom says: Don't forget Insurance! Joe's mom says that he'll have to pay outrageous insurance rates on a Porsche. Joe has been told that insurance rates are dependent upon the driver's age. His driver's training instructor gave Joe the following table to help him out. It shows insurance rates for a male Porsche driver with a perfect driving record based on different ages. Driver's Age 18 Annual Insurance Rate $5 575.30 19 $5 296.54 20 $5 031.71 21 $4 780.12 22 $4 541.12 23 $4 314.06 Determine the equation of best fit for this table please use a formula and explain in detail? d) Use your results to determine Joe's annual insurance rate when he purchases his Porsche e) If Joe decides to pay his insurance monthly instead of yearly, what will be his total monthly costs for his car payments and insurance? Should Joe rethink his Porsche dream? Explain your thinking.
Part II: Joe and his Dream Porsche Joe is 16 years old and has decided that he wants a brand-spankin' new Porsche Boxter Convertible, but his mom says there's no way that he could ever afford it! So, Joe has decided to show his mom that he will be able to purchase his dream car at the age of 35 if he plans his finances just right. He's asked you to help him plan. A. How much will his car cost in 19 years? The following table shows the approximate MSRP (manufacturers suggested retail price) of a Porsche Boxter Convertible from 2004 to 2008. Create a scatter plot of the data and determine the line of best fit, finding an appropriate slope and initial value assuming it started in 2004.. MSRP Year 2004 $57 510 2005 $59 130 2006 $60 750 2007 $61 965 2008 $63 600 b) find the equation using any formula in detail e) Use your equation to determine the MSRP of a new Porsche Boxster Convertible in the year that Joe turns 35 if he was born in 2000 B. Financing Joe's new Porsche Joe knows that he will have to put 10% down on his car. To save up for this down payment, he plans on investing a set amount monthly, starting now, into Teen's Choice Financial's Interest Plus Savings Account which pays 4% compounded monthly. a) How much will Joe have to put down on his Porsche? b) Using the TVM solver, determine how much Joe must deposit monthly into his savings account to have his down payment by the time he turns 35? c) After his down payment, Joe hopes to finance the rest of the purchase price at 8.2% compounded monthly over 84 months. Using the TVM solver determines Joe's monthly payments. C. Mom says: Don't forget Insurance! Joe's mom says that he'll have to pay outrageous insurance rates on a Porsche. Joe has been told that insurance rates are dependent upon the driver's age. His driver's training instructor gave Joe the following table to help him out. It shows insurance rates for a male Porsche driver with a perfect driving record based on different ages. Driver's Age 18 Annual Insurance Rate $5 575.30 19 $5 296.54 20 $5 031.71 21 $4 780.12 22 $4 541.12 23 $4 314.06 Determine the equation of best fit for this table please use a formula and explain in detail? d) Use your results to determine Joe's annual insurance rate when he purchases his Porsche e) If Joe decides to pay his insurance monthly instead of yearly, what will be his total monthly costs for his car payments and insurance? Should Joe rethink his Porsche dream? Explain your thinking.
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
Related questions
Question
please solve in great detail
Transcribed Image Text:Part II: Joe and his Dream Porsche
Joe is 16 years old and has decided that he wants a brand-spankin' new Porsche Boxter
Convertible, but his mom says there's no way that he could ever afford it! So, Joe has
decided to show his mom that he will be able to purchase his dream car at the age of 35
if he plans his finances just right. He's asked you to help him plan.
A. How much will his car cost in 19 years?
The following table shows the approximate MSRP (manufacturers suggested retail price)
of a Porsche Boxter Convertible from 2004 to 2008. Create a scatter plot of the data and
determine the line of best fit, finding an appropriate slope and initial value assuming it
started in 2004..
MSRP
Year
2004
$57 510
2005
$59 130
2006
$60 750
2007
$61 965
2008
$63 600
b)
find the equation using any formula in detail
e) Use your equation to determine the MSRP of a new Porsche Boxster Convertible in
the year that Joe turns 35 if he was born in 2000
B. Financing Joe's new Porsche
Joe knows that he will have to put 10% down on his car. To save up for this down
payment, he plans on investing a set amount monthly, starting now, into Teen's Choice
Financial's Interest Plus Savings Account which pays 4% compounded monthly.
a) How much will Joe have to put down on his Porsche?
b) Using the TVM solver, determine how much Joe must deposit monthly into his
savings account to have his down payment by the time he turns 35?
c) After his down payment, Joe hopes to finance the rest of the purchase price at 8.2%
compounded monthly over 84 months. Using the TVM solver determines Joe's monthly
payments.
C. Mom says: Don't forget Insurance!
Joe's mom says that he'll have to pay outrageous insurance rates on a Porsche. Joe
has been told that insurance rates are dependent upon the driver's age. His driver's
training instructor gave Joe the following table to help him out. It shows insurance rates
for a male Porsche driver with a perfect driving record based on different ages.
Transcribed Image Text:Driver's Age
18
Annual Insurance
Rate
$5 575.30
19
$5 296.54
20
$5 031.71
21
$4 780.12
22
$4 541.12
23
$4 314.06
Determine the equation of best fit for this table please use a formula and explain in
detail?
d) Use your results to determine Joe's annual insurance rate when he purchases his
Porsche
e) If Joe decides to pay his insurance monthly instead of yearly, what will be his total
monthly costs for his car payments and insurance? Should Joe rethink his Porsche
dream? Explain your thinking.
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