Solve #4 and #5

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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Solve #4 and #5

1. Computation of Down Payment Amount
Down payment amount = Total price × Down payment percent
= 38, 530 × 20%
= $7, 706
2. Computation of Amount Financed
Amount f inanced
= Total price – Down payment amount
= 38, 530 – 7,706
%3D
= $ 30, 824
3. Computation of Monthly Payment
The monthly payment of a loan can be computed
by using the 'PMT' function in Excel, where
Interest rate
Rate
Number of periods
3.79%
12
Number of periods ( Nper) = 72
Transcribed Image Text:1. Computation of Down Payment Amount Down payment amount = Total price × Down payment percent = 38, 530 × 20% = $7, 706 2. Computation of Amount Financed Amount f inanced = Total price – Down payment amount = 38, 530 – 7,706 %3D = $ 30, 824 3. Computation of Monthly Payment The monthly payment of a loan can be computed by using the 'PMT' function in Excel, where Interest rate Rate Number of periods 3.79% 12 Number of periods ( Nper) = 72
Based on the car you chose (2021 Jeep Wrangler),
state:
1. The total price of the car: $38, 530
2. Down payment percent: 20%
3. Interest rate: 3.79%
4. Loan term: 72 Months
Calculate:
1. Down payment amount.
2. Amount financed (loan amount).
3. Monthly payment.
4. Total interest paid.
5. Amortization schedule for the first three months.
Transcribed Image Text:Based on the car you chose (2021 Jeep Wrangler), state: 1. The total price of the car: $38, 530 2. Down payment percent: 20% 3. Interest rate: 3.79% 4. Loan term: 72 Months Calculate: 1. Down payment amount. 2. Amount financed (loan amount). 3. Monthly payment. 4. Total interest paid. 5. Amortization schedule for the first three months.
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