Supposed that a person buys a new car. The person wishes to set aside enough money in a bank account to pay the maintenance of the car for the first 5 years. How much money should the person deposit in the beginning which is just enough to pay all the maintenance costs for the first 5 years. The anticipated maintenance costs of the car are:   Year Maintenance Cost 1  $120 2  $150 3  $180 4  $210 5  $240

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A: Please see the next step for the solution

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A: A. Time to be taken can be computed as follows : Calculations :

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A: Present value of future cash flows Discount rate 5%

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A: Using the PMT function

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A: Monthly Installment  = Loan AmountPVAIF (Interest rate , Number of months

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A: Refinancing cost = $3000 Reduction in payments = $800 Interest rate = 8%

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A:

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A: Information Provided: Term = 10 years Monthly Deposit = 6000 Future value = 756,000

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A: Car value (V) = $2500 Annual depreciation rate (d) = 3% Period (n) = 4 years

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A: Given information :

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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.