Time-share sales provide an opportunity for vacationers to own a resort condo for 1 week (or more) each year forever. The owners may use their week at their own condo or trade the week and vacation elsewhere. Time-share vacation sales usually require payment in full or financing through the time-share company, and interest rates are usually in the 13% to 18% range. Suppose the cost to buy a 1-week time-share in a 3-bedroom condo is $21,853. Also suppose a 10% down payment is required, with the balance financed for 15 years at 17%, compounded monthly. (Round your answers to the nearest cent.) (a) Find the monthly payment. $ (b) Determine the total cost over the life of the loan. $ (c) Suppose maintenance fees for this condo are $400 per year. Find the annual cost of the condo over the life of the loan. Assume that the annual maintenance fees remain constant. $ (d) Use part (c) and the 10% down payment to determine the average annual cost for having this vacation condo for 1 week over the life of the loan. $
Time-share sales provide an opportunity for vacationers to own a resort condo for 1 week (or more) each year forever. The owners may use their week at their own condo or trade the week and vacation elsewhere. Time-share vacation sales usually require payment in full or financing through the time-share company, and interest rates are usually in the 13% to 18% range. Suppose the cost to buy a 1-week time-share in a 3-bedroom condo is $21,853. Also suppose a 10% down payment is required, with the balance financed for 15 years at 17%, compounded monthly. (Round your answers to the nearest cent.) (a) Find the monthly payment. $ (b) Determine the total cost over the life of the loan. $ (c) Suppose maintenance fees for this condo are $400 per year. Find the annual cost of the condo over the life of the loan. Assume that the annual maintenance fees remain constant. $ (d) Use part (c) and the 10% down payment to determine the average annual cost for having this vacation condo for 1 week over the life of the loan. $
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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Time-share sales provide an opportunity for vacationers to own a resort condo for 1 week (or more) each year forever. The owners may use their week at their own condo or trade the week and vacation elsewhere. Time-share vacation sales usually require payment in full or financing through the time-share company, and interest rates are usually in the 13% to 18% range. Suppose the cost to buy a 1-week time-share in a 3-bedroom condo is $21,853. Also suppose a 10% down payment is required, with the balance financed for 15 years at 17%, compounded monthly. (Round your answers to the nearest cent.)
(a) Find the monthly payment.
$
(b) Determine the total cost over the life of the loan.
$
(c) Suppose maintenance fees for this condo are $400 per year. Find the annual cost of the condo over the life of the loan. Assume that the annual maintenance fees remain constant.
$
(d) Use part (c) and the 10% down payment to determine the average annual cost for having this vacation condo for 1 week over the life of the loan.
$
(b) Determine the total cost over the life of the loan.
$
(c) Suppose maintenance fees for this condo are $400 per year. Find the annual cost of the condo over the life of the loan. Assume that the annual maintenance fees remain constant.
$
(d) Use part (c) and the 10% down payment to determine the average annual cost for having this vacation condo for 1 week over the life of the loan.
$
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