Problem 8-9 Buying versus Leasing a Motor Vehicle [LO8-2]Purchase CostsDown paymentLoan paymentEstimated value at end of loanOpportunity cost interest rateLeasing CostsSecurity deposit$ 1,900Total purchase costTotal leasing cost$550 for 36 months16,98516,340 X$5,0005 percentLease paymentEnd of lease chargesBased on the costs listed in the table above, calculate the costs of buying and of leasing a motor vehicle.Note: Round your answers to the nearest whole number.$ 1,040Answer is complete but not entirely correct.Buying and Leasing$$$400 for 36 months$ 900

Purchase cost :Down payment = $1,900Loan payment = $550 for 36 monthsEstimated value at the end of…

Answered: Problem 8-9 Buying versus Leasing a…

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

Similar questions

D
Vijay
Problem 6-18 Interest costs under alternative plans [LO6-3] Carmen's Beauty Salon has estimated monthly financing requirements for the next six months as follows: $8,100 April Мay January $8,100 February 2,100 9,100 4,100 March 3,100 June Short-term financing will be utilized for the next six months. Projected annual interest rates are: April Мay 12.0% January February March 5.0% 6.0% 12.0% 9.0% June 12.0% a. Compute total dollar interest payments for the six months. (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent.) Total dollar interest payments
17 Problem 5-39 Loan Payments (LG5-9) You wish to buy a $20,500 car. The dealer offers you a 5-year loan with a 9 percent APR. What are the monthly payments? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Answer is complete and correct. Payment $ 425.55 per month Payment How would the payment differ if you paid interest only? (Do not round intermediate calculations and round your final answer to 2 decimal places.) 4 per month
Problem 25-7 (LG 25-4) Assume an Fl originates a pool of short-term real estate loans worth $39 million with maturities of five years and paying interest rates of 7 percent (paid annually). The loans are amortized. a. What is the average payment received by the FI (both principal and interest) if no prepayment is expected over the life of the loans? b. If the loans are converted into real estate certificates and the Fl charges a 150 basis points servicing fee (including insurance), what are the payments expected by the holders of the securities, if no prepayment is expected? (For all requirements, enter your answers in dollars not in millions. Do not round intermediate calculations. Round your answers to the nearest dollar amount.) × Answer is complete but not entirely correct. Average payment $ 9,511,737 b. Average payment $ 9,369,061 (X)
9
Problem 4-51 Calculating Annuities Due You want to lease a set of golf clubs from Pings Ltd. The lease contract is in the form of 36 equal monthly payments at an APR of 8.5 percent compounded monthly. Because the clubs cost $3,200 retail, the company wants the value today of the lease payments to equal $3,200. Suppose that your first payment is due immediately. What will your monthly lease payments be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Lease payment
F16 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 1 2 Loan Amount 3 Annual Interest Rate 4 #times per year interest accrued 5 Periodic Rate 6 Term (years) 7 #payments per year 8 Number of payments 9 Balloon (balance after final payment) 10 Points paid at origination to get loan 11 12 32 33 34 35 36 37 38 39 40 DA Home Insert Cut Copy Format 41 42 Paste 43 44 ▾ Ready Sheet1 ✓ fx A Page Layout Calibri (Body) ▼ 11 BIU Sheet2 ▼ Formulas + B $1,000,000.00 7.66% 12 0.64% 30 12 360 Data A- A ▾ C Review View $0.00 AKA "Fully Amortizing" 1.50% t D 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 22 EE E Wrap Text + Merge & Center ▾ Balance in (t): B_(t) $1,000,000.00 F X Project Custom Interest in (t+1): (i/m)*B_t $6,383.33 % % > G +.0 .00 Payment in (t+1) $7,102.03 .00 ➡.0 Conditional Format Formatting as Table H Balance in (t+1): B_(t+1) $999,281.30 $0.00 I Cell Styles J H Insert X H Delete K Format Principal paid in (t+1)(=PMT-INT) 圓 Q Search…
Problem 9-5 Calculating Monthly Mortgage Payments [LO9-4] Based on Exhibit 9-9, or using a financial calculator, what would be the monthly mortgage payments for each of the following situations? Note: Round time value factor and final answers to 2 decimal places. What relationship exists between the length of the loan and the monthly payment? How does the mortgage rate affect the monthly payment? a. $120,000, 15-year loan at 5 percent. b. $86,000, 30-year loan at 4.5 percent. c. $105,000, 20-year loan at 4 percent. d-1. Longer mortgage terms mean a d-2. For increase in mortgage rate monthly payment. Monthly Mortgage Payment monthly payment is required.
Problem 5-10 A floating rate mortgage loan is made for $160,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $1,280. Required: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,280? Complete this question by entering your answers in the tabs below. Required A Required B If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,280? Note: Do not round intermediate calculations. Round your final answers to 2 decimal places. Loan balance in year 2 Interest accrued - Year 2 Interest accrued - Years 2 - Year 5
Problem 5-10 A floating rate mortgage loan is made for $180,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $1,440. Required: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,440? Complete this question by entering your answers in the tabs below. Required A Required B Answer is not complete. What will be the loan balance at the end of year 1? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. $ 178,103.48 X Loan balance
Calculating the Total Interest Payment for a negative amortizing CPM: $100,000 Mortgage 7% Interest 30 Years Monthly Payments 110% unpaid loan balance at maturity Answer is 217,049.1 but need help with work!!!!

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

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