tab Q W R T Y U A S D F G H caps lock shift control こ J Z x C V B N M r C 1 delete ( o P K L return ? 36 a Consider the italicized scenario below. Amortization You are interested in purchasing a 2023 Subaru Outback. Suppose the model you are looking at comes to $45,987.87 after taxes. You have a down payment that knocks the price down so that you only need to finance $40,000. The terms of your loan are: 5.5% per year, compounded monthly, for 8 years. Calculate your monthly payment, R. Call the set of terms for your loan as outlined in the problem above, with monthly payment R. PLAN 1. b According to PLAN 1, calculate the sum of all n payments of $R. C According to PLAN 1, how much interest do you pay over the eight years? e d According to the terms of your loan, there is no penalty if you pay off your loan early. After reviewing your budget, you think you may be able to swing Z=$850.00 as your periodic payment; instead of the payment calculated in question 1a. Call the set of terms for your loan as outlined in the problem above, with monthly payment Z, PLAN 2. Construct an Amortization Schedule for either PLAN 1 (Monthly Payment R) or for PLAN 2 (Monthly Payment Z). You must complete rows 0 through 24 of the Amortization Schedule, which is representative of the first two years of your loan. Please note that the loan will not yet be paid off, so B24 will not be 0. Make a conjecture about how many total rows of the schedule may be needed to amortize the loan under PLAN 2. Justify your answer. Please note that, while it is not required that you complete the schedule, you may choose to do so. Doing so would not earn you bonus, but doing so incorrectly would also not affect the points earned from question 1d. shift
tab Q W R T Y U A S D F G H caps lock shift control こ J Z x C V B N M r C 1 delete ( o P K L return ? 36 a Consider the italicized scenario below. Amortization You are interested in purchasing a 2023 Subaru Outback. Suppose the model you are looking at comes to $45,987.87 after taxes. You have a down payment that knocks the price down so that you only need to finance $40,000. The terms of your loan are: 5.5% per year, compounded monthly, for 8 years. Calculate your monthly payment, R. Call the set of terms for your loan as outlined in the problem above, with monthly payment R. PLAN 1. b According to PLAN 1, calculate the sum of all n payments of $R. C According to PLAN 1, how much interest do you pay over the eight years? e d According to the terms of your loan, there is no penalty if you pay off your loan early. After reviewing your budget, you think you may be able to swing Z=$850.00 as your periodic payment; instead of the payment calculated in question 1a. Call the set of terms for your loan as outlined in the problem above, with monthly payment Z, PLAN 2. Construct an Amortization Schedule for either PLAN 1 (Monthly Payment R) or for PLAN 2 (Monthly Payment Z). You must complete rows 0 through 24 of the Amortization Schedule, which is representative of the first two years of your loan. Please note that the loan will not yet be paid off, so B24 will not be 0. Make a conjecture about how many total rows of the schedule may be needed to amortize the loan under PLAN 2. Justify your answer. Please note that, while it is not required that you complete the schedule, you may choose to do so. Doing so would not earn you bonus, but doing so incorrectly would also not affect the points earned from question 1d. shift
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
None
Transcribed Image Text:tab
Q
W
R
T
Y
U
A
S
D
F
G
H
caps lock
shift
control
こ
J
Z
x
C
V
B
N
M
r
C
1
delete
(
o
P
K
L
return
?
36
a
Consider the italicized scenario below.
Amortization
You are interested in purchasing a 2023 Subaru Outback. Suppose the model you are looking at
comes to $45,987.87 after taxes. You have a down payment that knocks the price down so that you
only need to finance $40,000. The terms of your loan are: 5.5% per year, compounded monthly,
for 8 years.
Calculate your monthly payment, R. Call the set of terms for your loan as outlined in the
problem above, with monthly payment R. PLAN 1.
b
According to PLAN 1, calculate the sum of all n payments of $R.
C
According to PLAN 1, how much interest do you pay over the eight years?
e
d
According to the terms of your loan, there is no penalty if you pay off your loan early. After
reviewing your budget, you think you may be able to swing Z=$850.00 as your periodic payment;
instead of the payment calculated in question 1a. Call the set of terms for your loan as outlined in
the problem above, with monthly payment Z, PLAN 2.
Construct an Amortization Schedule for either PLAN 1 (Monthly Payment R) or for PLAN 2
(Monthly Payment Z). You must complete rows 0 through 24 of the Amortization Schedule,
which is representative of the first two years of your loan. Please note that the loan will not
yet be paid off, so B24 will not be 0.
Make a conjecture about how many total rows of the schedule may be needed to amortize
the loan under PLAN 2. Justify your answer. Please note that, while it is not required that
you complete the schedule, you may choose to do so. Doing so would not earn you bonus,
but doing so incorrectly would also not affect the points earned from question 1d.
shift
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