Problem 4: Suppose you buy a used car for $9,500 and finance it at 8%. Determine the monthly payment and total cost of the car if the car is financed over the number of years given: Monthly Payment Total Cost (Monthly Payment × n) (a) Four years (b) Five years (c) Now calculate how much you would have after 4 years if you SAVE the equivalent 4-year car payment each month in an annuity that earns 5%. How much would you have to spend on a car after four years?

Problem 4: Suppose you buy a used car for $9,500 and finance it at 8%. Determine the monthly payment and total cost of the car if the car is financed over the number of years given: Monthly Payment Total Cost (Monthly Payment × n) (a) Four years (b) Five years (c) Now calculate how much you would have after 4 years if you SAVE the equivalent 4-year car payment each month in an annuity that earns 5%. How much would you have to spend on a car after four years?

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

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Similar questions

Suppose you want to accumulate $20,000 for a down payment on a house in 5 years. How much must you deposit today into an account with an APR of 5% compounded monthly in order to have $20,000 in 5 years? PV = PMT= FV = APR = Periods = Compounding:
answer this image
3) You have a financial goal of putting a $10,0000 down payment on a home in 5 years. How much would you need to save each year if you could earn 8% annually? A) $1,423.44 B) $1,704.56 C) $1,990.50 D) $2,200.23
Suppose you want to save up for a down payment on a house in 5 years. You plan to save $1,000 per month in a savings account. The savings account offers an annual interest rate of 6%. a) If the payments are made at the end of each month, how much money will you have at the end of 5 years? b) If the payments are made at the beginning of each month, how much money will you have at the end of 5 years?
Suppose you decide to buy a car for $25,485, including taxes and licensing fees. You saved $10,000 for a down payment and can get a five- year loan at 6.52%. Use the present value of an annuity formula to find the monthly payment. Round to the nearest cent as needed. -nt pmt 1- P = $218.99 O $303.13 O $498.88 O $8413.52
Suppose you can afford to pay $ 275 a month for 5 years towards a new car with no down payment. If the current interest rates are 5%, how expensive a car can you afford?
You buy a car for $34,000. You pay $10,000 down and finance the rest at 3% monthly over five years. If the payment is rounded up to the nearest dollar, what is the final payment?
You take out a 5-year amortized loan to buy a new car. After making monthly payments of $246.50 for 3 years, you still owe $5,424 If you decided to pay the loan off, how much will you save in interest? A total of Swould be saved in interest. (Round to the nearest cent as needed)
Quantitative Problem: You need $14,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 4 years, with the first payment to be made one year from today. He requires a 9% annual return. a. What will be your annual loan payments? Do not round intermediate calculations. Round your answer to the nearest cent. b. How much of your first payment will be applied to interest and to principal repayment? Do not round intermediate calculations. Round your answers to the nearest cent. Interest: $ Principal repayment: $
Suppose you can afford to pay $ 350 a month for 5 years towards a new car with no down payment. If the current interest rates are 4.5%, how expensive a car can you afford?

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