Susan and Joe would like you to help them adress spme of their financial goals. They would like to know if susan should finance or use the cash allowance option to buy her next car (2020 Chrysler 300). Currently, they are still paying for her car that they bought in January of 2016 (Chrysler 300, MSRP: $40,000, Interest Rate 4.13%, Length=5 years, down payment 4,000). Finance options MSRP:$39,595 Interest rate:0% length: 36 months Down payment required: 30% inflation: 3 % (Do not include residual value in calculations) Cash Allowance option: MSRP: $39.595 Cash Allowance: $3,500 Down payment required: 30% Length: 36 months Interest: 4% Inflation: 3% Current car loan: 1. How much are they paying for their current car loan (Monthly)? 2. How much do they Owe for their current loan (balance)? 3. How much interest have they paid for the life of the loan (From January, 2016 to April 1, 2020)? 4. How much principal have they paid for the life of the loan (from January, 2016 to April 1, 2020)? 5. What is the NPV of Financing options? (Please show your calculation) 6. What is the NPV of cash allowance option? (Please show your calculation) 7. Which option would you recommend based on your calculations? Why?
Susan and Joe would like you to help them adress spme of their financial goals. They would like to know if susan should finance or use the cash allowance option to buy her next car (2020 Chrysler 300). Currently, they are still paying for her car that they bought in January of 2016 (Chrysler 300, MSRP: $40,000, Interest Rate 4.13%, Length=5 years, down payment 4,000).
Finance options
MSRP:$39,595
Interest rate:0%
length: 36 months
Down payment required: 30%
inflation: 3 %
(Do not include residual value in calculations)
Cash Allowance option:
MSRP: $39.595
Cash Allowance: $3,500
Down payment required: 30%
Length: 36 months
Interest: 4%
Inflation: 3%
Current car loan:
1. How much are they paying for their current car loan (Monthly)?
2. How much do they Owe for their current loan (balance)?
3. How much interest have they paid for the life of the loan (From January, 2016 to April 1, 2020)?
4. How much principal have they paid for the life of the loan (from January, 2016 to April 1, 2020)?
5. What is the
6. What is the NPV of cash allowance option? (Please show your calculation)
7. Which option would you recommend based on your calculations? Why?
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