the The Financial Advis local newspaper. Assume you must answer the fol- lowing question. "I need a new car that I will keep for 4 years. I have three options. I can (A) pay $32.90 now, (B) make monthly payments for a 7% 4-year loạn with 0% down, or (C) make lease payments of $425 per month for the next 4 years. The lease option also requires an up-front payment of $3500. What should I do?" Assume that the number of miles driven matches the assumptions for the lease, and the vehicle's value after 4 years is $14,500. Remember that lease pay- ments are made at the beginning of the month, and the salvage value is received only if you own the vehicle. $32,999 (a) Develop a choice table for nominal interest rates from 0% to 50%. (You do not know what the reader's interest rate is.) (b) If i= 8%, which option should be chosen'

the The Financial Advis local newspaper. Assume you must answer the fol- lowing question. "I need a new car that I will keep for 4 years. I have three options. I can (A) pay $32.90 now, (B) make monthly payments for a 7% 4-year loạn with 0% down, or (C) make lease payments of $425 per month for the next 4 years. The lease option also requires an up-front payment of $3500. What should I do?" Assume that the number of miles driven matches the assumptions for the lease, and the vehicle's value after 4 years is $14,500. Remember that lease pay- ments are made at the beginning of the month, and the salvage value is received only if you own the vehicle. $32,999 (a) Develop a choice table for nominal interest rates from 0% to 50%. (You do not know what the reader's interest rate is.) (b) If i= 8%, which option should be chosen'

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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You went to the car dealer to lease a car. The car is valued at $30,000 and you can drive away without putting any money down. The dealer offers you a 5 year lease with a $5,000 residual payment at the end if you want to buy the car. Assuming monthly payments of $508.32, what is the implied APR? Your answer should be close to a round number. Use a % symbol and round to the nearest 1 decimal point.....3.0% would be the form of a correct answer.
Ann Is buying a new home for $365,000. She is choosing between 2 loan options. Loan A is a 15-year mortgage at 5% annual interest with a $25,000 down payment and $2688.70 monthly payment. Loan B is a 30-year mortgage at 4% annual interest with a $10,000 down payment and a $1694.82 monthly payment. Which loan has the lowest total cost? a Loan A is lower cost as it is approximately $111,170 less expensive than Loan B. b Loan B is approximately $87,235 less expensive than Loan A. c Loan B is approximately $52,379 less expensive than Loan A. d Loan A is approximately $102,473 less expensive than Loan B.
Adam can purchase a new car for $30,000. Alternatively, in addition to a down payment of $2,200, Adam can make lease payments of $525 at the beginning of each month for three years to lease the car. The car has a residual value of $15,000. Assume that the cost of borrowing is 3.95% compounded monthly. a. Which option is economically better for Adam? Buy Now or Lease b. In the lease option, what will be the buyback value of the vehicle at the end of two years?
Please show how to solve this using excel and please show all formulas in the spreadsheet please!! Thomas decides to buy a house with price of $450,000. Thomas puts 20% down payment and considers a 30-year fixed rate mortgage to pay the remaining balance. The lender offers Thomas two choices of the mortgage with monthly payments shown in the table as choice 1 and choice 2, assume that the origination cost is $6,000. A. If you hold the loan for 30 years, what is the effective cost for each choice? B. How about the effective cost for each choice if the loan will only be outstanding for 5 years (60 months) (i.e. the borrow will pay off the loan at the end of 60 months)?
mead. 13. I am car shopping. Here are the options: Option A: New car for $28,000 6-year installment loan at 3.9% Option B: Used car for $22,000 6-year installment loan at 5.9% 2X If both options require monthly payments, which is the better option? Provide calculations AND a written response to support your choice. (Hint: start by calculating monthly payment amounts)
None
If you buy a home with less than 20% down, you will pay an additional monthly fee, PMI (private mortgage insurance), until you reach 20% equity. Keep track of when you reach 20% equity so you can request to have your PMI removed. Ken Buckmiller’s home recently appraised at $307,000. His mortgage was for $292,000 at 5% for 30 years with PMI of $299.17 per month. What is his monthly payment plus PMI? His mortgage balance is currently $184,200. Has he reached 20% equity? (Use Table 15.1.) Note: Round your intermediate calculations and final answer to the nearest cent. The answer is NOT $1,866.63 Monthly payment:????
lowing question. "I need a new car that I will keep for 4 years. I have three options. I can (A) pay $32,999 local newspaper. Assume you must answer the fol- now, (B) make monthly payments for a 7% 4-year (a) Develop a choice table for nominal interest rates from 0% to 50%. (You do not know what the Assume you must answer the fol. local newspaper. A 4 years. I have three options. I can (A) pay now, (B) make monthly payments for a 7% 4-vear loạn with 0% down, or (C) make lease payments of $425 per month for the next 4 years. The lease option also requires an up-front payment of $3500. What should I do?" $32,999 Assume that the number of miles driven matches the assumptions for the lease, and the vehicle's value after 4 years is $14,500. Remember that lease pay- ments are made at the beginning of the month, and the salvage value is received only if you own the vehicle. reader's interest rate is.) (b) If i = 8%, which option should be chosen? 8-41 The Financial Aduin

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