using excel Assume you've graduated and get the dream job and need transportation to go to work (problem definition)- so you need to purchase a car (objective). You would like to analyze your financial options to purchase the car you want and at the same time spent the minimum possible (decision making criteria). You prefer to pay around 3000$/year (requirements) but if it helps to reduce the cost you can pay more. Explore the options of (compare alternatives to save $) 1- Getting a loan of 20K over 5 years at 5%, how much is your yearly payments. Hint: (=PMT(i,n,p) ) 2- Searching for a better loan at 4%- how much you save? (compare total interest paid I1-I2) 3- Try to pay up your loan quicker like 3 years- See how much you save in Interest paid. (compare total interest paid ) 4 - Negotiated the purchase down to 18.5K and see how much you save in interest. (compare total interest paid as well as the total paid) 5- Put down more money at the beginning (Parents are very nice and loaned you 2K for 3 years)- Ethics question: Do you think you need to pay back to your parents. How much 2K or 2K+ interest 6- Pay additional 50 $ extra payments every year. See how much you save- (compare total interest paid) Use graphs to Illustrate the amount of savings for each alternative and Compare and Report the Results. 7- At the end of the year you lost your job - and then found another one but it doesn't pay as well as your previous job- so you need to reduce the loan payments- How can you do it, if possible. (Time & rate) Yes possible try to refinance with either longer term or lower rates Question is how much it will cost - if you are giving the option of 10 years - How much extra it will cost you
using excel
Assume you've graduated and get the dream job and need transportation to go to work (problem definition)-
so you need to purchase a car (objective).
You would like to analyze your financial options to purchase the car you want and
at the same time spent the minimum possible (decision making criteria).
You prefer to pay around 3000$/year (requirements)
but if it helps to reduce the cost you can pay more.
Explore the options of (compare alternatives to save $)
1- Getting a loan of 20K over 5 years at 5%, how much is your yearly payments.
Hint: (=PMT(i,n,p) )
2- Searching for a better loan at 4%- how much you save?
(compare total interest paid I1-I2)
3- Try to pay up your loan quicker like 3 years-
See how much you save in Interest paid. (compare total interest paid )
4 - Negotiated the purchase down to 18.5K and see how much you save in interest.
(compare total interest paid as well as the total paid)
5- Put down more money at the beginning (Parents are very nice and loaned you 2K for 3 years)-
Ethics question: Do you think you need to pay back to your parents. How much 2K or 2K+ interest
6- Pay additional 50 $ extra payments every year. See how much you save- (compare total interest paid)
Use graphs to Illustrate the amount of savings for each alternative and
Compare and Report the Results.
7- At the end of the year you lost your job - and then found another one
but it doesn't pay as well as your previous job-
so you need to reduce the loan payments- How can you do it, if possible. (Time & rate)
Yes possible try to refinance with either longer term or lower rates
Question is how much it will cost -
if you are giving the option of 10 years - How much extra it will cost you
both in interest and the upfront cost of refinancing.
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