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WA Internet Cafe is planning to buy a minivan for delivery and pick up. The price of the vehicle is $25,000 To purchase this minivan, they have $3,000, as a down payment, the dealer has given them a discount equal to 5- of the full price of the vehicle, and for the rest, they need to apply for a loan in order to buy the vehicle. Using the following figures, calculate the monthly payment for the above loan. What is their bi-weekly payment, if they want to explore that option? Price of the Vehicle: Down Payment: Dealer's Special Discount: Annual Interest Rate: Term of the Loan (Year): $ 25,000.00 $ 3,000.00 5% 4.90% 5

WA Internet Cafe is planning to buy a minivan for delivery and pick up. The price of the vehicle is $25,000 To purchase this minivan, they have $3,000, as a down payment, the dealer has given them a discount equal to 5- of the full price of the vehicle, and for the rest, they need to apply for a loan in order to buy the vehicle. Using the following figures, calculate the monthly payment for the above loan. What is their bi-weekly payment, if they want to explore that option? Price of the Vehicle: Down Payment: Dealer's Special Discount: Annual Interest Rate: Term of the Loan (Year): $ 25,000.00 $ 3,000.00 5% 4.90% 5

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Minivan Loan Calculation for Downtown Internet Café** The Downtown Internet Café is planning to buy a minivan for delivery and pick-up purposes. The financial details for purchasing the minivan are as follows: - **Price of the Vehicle:** $25,000 - **Down Payment:** $3,000 - **Dealer's Special Discount:** 5% of the vehicle price - **Annual Interest Rate:** 4.90% - **Term of the Loan:** 5 years ### Objective 1. **Calculate the Monthly Payment:** Determine the monthly payment for the loan by considering the down payment, dealer discount, interest rate, and loan term. 2. **Calculate the Bi-Weekly Payment:** Optionally, evaluate what the bi-weekly payment would be under the same conditions. ### Steps to Compute - **Discount Calculation:** - The dealer offers a 5% discount on the vehicle, which reduces the initial amount needed to finance. - **Loan Calculation:** - Subtract the down payment and the discount from the purchase price to determine the loan amount. - **Interest and Term:** - Using the annual interest rate and the 5-year loan term, calculate monthly and bi-weekly payments. ### Uncomputed Values - **Monthly Payment:** To be computed - **Bi-Weekly Payment:** To be computed This calculation helps the café budget for their new vehicle effectively and explore the payment option that suits them best.
Transcribed Image Text:**Minivan Loan Calculation for Downtown Internet Café** The Downtown Internet Café is planning to buy a minivan for delivery and pick-up purposes. The financial details for purchasing the minivan are as follows: - **Price of the Vehicle:** $25,000 - **Down Payment:** $3,000 - **Dealer's Special Discount:** 5% of the vehicle price - **Annual Interest Rate:** 4.90% - **Term of the Loan:** 5 years ### Objective 1. **Calculate the Monthly Payment:** Determine the monthly payment for the loan by considering the down payment, dealer discount, interest rate, and loan term. 2. **Calculate the Bi-Weekly Payment:** Optionally, evaluate what the bi-weekly payment would be under the same conditions. ### Steps to Compute - **Discount Calculation:** - The dealer offers a 5% discount on the vehicle, which reduces the initial amount needed to finance. - **Loan Calculation:** - Subtract the down payment and the discount from the purchase price to determine the loan amount. - **Interest and Term:** - Using the annual interest rate and the 5-year loan term, calculate monthly and bi-weekly payments. ### Uncomputed Values - **Monthly Payment:** To be computed - **Bi-Weekly Payment:** To be computed This calculation helps the café budget for their new vehicle effectively and explore the payment option that suits them best.
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