Suppose you want to buy a car right now. Your credit is pretty good so you can get an 4% I interest rate on the loan for the car. You can afford to make payments of $300 each month. You would like to pay this loan back over 4 years.    How much car can you afford?

Q: 5. Suppose you need $10,000 in one year for the down payment on a new car. If you can earn 7%…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: Suppose you are planning to buy a car and just found one that is selling for $5,700. You have $1,000…

A: Equated monthly payment is a fixed payment given by the borrower of the loan to the lender on a…

Q: Example 5: While shopping for a car loan, you get the following offers: Solid Savings & Loan is…

A: We need to use pmt formula in excel to calculate monthly payment. Where monthly payment is 250 or…

Q: a) You first go to a used car lot. You find a used Corolla for $6000. The dealer offers you a loan…

A: Equated monthly installments (EMI) is the equally divided installments of the loan outstanding…

Q: You are deciding to buy a car to commute to work given the comparatively low interest of 6% per…

A: A loan is a debt arrangement that provides financial assistance to a person to full fill a specific…

Q: You are looking to buy a car and can afford to pay $210 per month. If the interest rate on a car…

A: Loan amount refers to an amount that is being borrowed by the borrower from the lender at a…

Q: you are saving money to buy a car. if you save $290 per month starting one month from now at an…

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: Suppose you can afford to pay $ 250 a month for 8 years towards a new car with no down payment. If…

A: Given details are : Monthly payment = $250 Time period = 8 years Interest rate = 4.75% We need to…

Q: You want to buy a $33,000 car. The company is offering a 5% interest rate for 5 years. What will…

A: The calculation of a loan's monthly payment is the subject of the topic. This is a typical financial…

Q: Someone offers an investment opportunity that will pay you $725 at the end o next 17 years. How much…

A: Maximum value is the present value of cash flow from the annuity based on the time value of money…

Q: You want to buy a $255,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan…

A: Amount of home = $255,000 Down payment = 5%  The time duration of the loan = 30 years

Q: You would like to purchase a new car in the side that you can afford monthly payments of $400 how…

A: The monthly payment is :The aim is to find the initial loan amount

Q: You decide to borrow money from your parents for down payment without interest. Decide on your down…

A: Down payment is the payment of money which are required at the time of making any purchases like the…

Q: suppose that you decide to borrow $15,000 for a new car. you can select one of the following loans,…

A: a.Loan ALoan Amount (pv) = $15,000Interest Rate (rate) = 5.9%Time Period = 3 YearsNumber of Payments…

Q: You can afford a $450 per month car payment. You've found a 3 year loan at 5% interest. How big of a…

A: Personal finance encompasses financial decisions and strategies that individuals make to manage…

Q: You are considering the purchase of a new car. You can afford a payment of $400 per month. You plan…

A: In the given problem we are considering to buy a new car and we want to know how much money we can…

Q: you can afford a $350 per month car payment. you found a three-year loan at 7% interest. how big of…

A: We need to use present value of loan formula below to calculate amount of loan for given…

Q: You are saving money to buy a car. If you save $330 per month starting one month from now at an…

A: Calculation of Future value:The value after 4 years is $18,981.83.Excel spreadsheet:

Q: After graduating from college and securing your first job in your field of study, you need to…

A: Car price = $92,500Down payment = 2%The amount of loan is

Q: You want to save $20,000 to purchase a new car. You place $700 a month in a special savings account…

A: Calculation of number of periods: Answer: It will take 26.77 years to save an amount of $20,000

Q: sidering buying a new car. The sticker price is $15, ment. If you can negotiate an annual interest…

A: In this we need to calculate present value factor and get monthly payment.

Q: A car dealer offers to buy your car for $9,500 so that you can purchase a new one. If your monthly…

A: We use pv function in excel to calculate pv of payments

Q: Miguel can afford to pay $125.00 per month for a car. He has $5,000.00 saved up for a down payment.…

A: When a borrower borrows a loan from the lender, He has to pay some interest charges on the loan…

Q: Full Name: 3. After a few years of saving you decide to purchase a car currently on sale for…

A: Amortization: Paying off the loan with a fixed repayment amount (installment). It is required to…

Q: You buy a car with a down payment of $1000 and $200 per month for 3 years. a) If the interest rate…

A: Loan amount is the present value of monthly payment based on time value of money and intrest rate of…

Q: Let’s pretend that we will buy a brand-new car online. How much is the car? How much is your…

A: When an asset is purchased is on loan, the purchaser pays down payment upright and then, the…

Q: Suppose you take out a loan for $15,000 to buy a car to start driving Uber as a side hustle. Suppose…

A: The objective of the question is to determine how long it will take to pay off a loan of $15,000…

Q: Finally, you have decided to buy a car. You are able to negotiate the price down to $12,000. You…

A: given, r = 2.5% n = 3 m =12 p =12000 applying formula for monthly payment:…

Q: .  You are purchasing a house for $310,000. You plan to take out a 25-year loan to pay for the…

A: a. The monthly payments will be $1812. Note: The calculation has been made on excel.

Q: You are planning to buy an used car from a local dealer. The list price of the car is $12,000. If…

A: List Price of Car = $12,000Down Payment = $5,500Cash cost of car = $11,000Bank Interest rate =…

Q: You want to buy a new car and have saved a down payment of $2000. The car that you want costs…

A: To solve the question, we first need to determine the amount for which the monthly payments has to…

Q: You need to purchase a car, but don’t have the money to buy it outright. Therefore, you’ll have to…

A: Cost of car=$11999 Down payment =5500 monthly payment =250 interest rate =7%

Q: You can afford a $350 per month car payment. You've found a 5 year loan at 6% interest. How big of a…

A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…

Q: Suppose you want to save in order to purchase a new car. Take the APR to be 3.6%. If you deposit…

A: Future value of annuity The future value of annuity refers to the total value of the investment at…

Q: Do you want to buy a new car. You can afford payments of 200 times per month and can borrow the…

A: Given Information: Monthly payments is $200 Annual interest rate is 4.9% (compounded monthly) Number…

Q: You have just taken out a five-year loan from a bank to buy an engagement ring. The ring costs…

A: correct answer is option a)   year 0 year 1 year 2 year 3 year 4 year 5               cash…

Q: If you have a car loan with a monthly payment of $625.00 and a purchase price of $30,000 : a. How…

A: Given information,Monthly payment: Purchase price: Number of periods:  yearsCompounding frequency:…

Q: You just got a new part-time job and you need to buy a new car for your job. Suppose you have enough…

A: Variables in the question:PMT=$400Annual interest rate=6%Monthly interest rate=6%/12=0.5%N=5…

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.