When interest rates are low, some automobile dealers offer loans at 0% APR, as indicated in a 2016 advertisement by a prominent car dealership, offering zero percent financing or cash back deals on some models. Zero percent financing means the obvious thing-that no interest is being charged on the loan. So if we borrow $1,200 at 0% interest and pay it off over 12 months, our monthly payment will be $1,200/12 = $100. Suppose you are buying a new truck at a price of $10,000. You plan to finance your purchase with a loan you will repay over two years. The dealer offers two options: either dealer financing with 0% interest, or a $1,000 rebate on the purchase price. If you take the rebate, you will have to go to the local bank for a loan (of $9,000) at an APR of 6.5%. Should you take the dealer financing or the rebate? (Assume you take the deal that saves you the most money.) dealer financing rebate How much would you save over the life of the loan by taking the option you chose? (Round your answer to the nearest cent.)

When interest rates are low, some automobile dealers offer loans at 0% APR, as indicated in a 2016 advertisement by a prominent car dealership, offering zero percent financing or cash back deals on some models. Zero percent financing means the obvious thing-that no interest is being charged on the loan. So if we borrow $1,200 at 0% interest and pay it off over 12 months, our monthly payment will be $1,200/12 = $100. Suppose you are buying a new truck at a price of $10,000. You plan to finance your purchase with a loan you will repay over two years. The dealer offers two options: either dealer financing with 0% interest, or a $1,000 rebate on the purchase price. If you take the rebate, you will have to go to the local bank for a loan (of $9,000) at an APR of 6.5%. Should you take the dealer financing or the rebate? (Assume you take the deal that saves you the most money.) dealer financing rebate How much would you save over the life of the loan by taking the option you chose? (Round your answer to the nearest cent.)

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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6. In your search for the best rate of on a new car loan, you note that various lenders quote rates with differing compounding frequencies. your car dealer offers financing at 5 % % compounded monthly. For you to be indifferent as to which lending rate to choose, what would the nominal rate be on a loan from another lender with interest compounded. a) quarterly? b) Semi-annually?
You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $500. The loan will have an 11% APR based on end-of-month payments. a. What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. b. What is the most expensive car you can afford if you finance it for 60 months? Do not round intermediate calculations. Round your answer to the nearest cent.
Suppose that Cougar Autos offers an "easy payment" scheme on a new Honda of $4,000 a year, paid at the end of each of the next four years, with no cash down. What is the car really costing you? The interest rate is 6% Show EXCEL formula.
According to money.CNN.com, with mortgage rates near 35-year lows, you may be able to cut your payments sharply by refinancing your loan. To qualify for the best rates, you need a credit score of 740 or higher and usually at least 20% equity. Even if you have to settle for a higher rate, a new loan may save you money. The main consideration is whether you will live in your home long enough to offset the refinance closing costs. Your current mortgage payment is $1,658.50 per month, with a balance of $219,800. Suppose you have a chance to refinance at a certain bank with a 30-year, 5.5% mortgage. The closing costs of the loan are application fee, $80; credit report, $165; title insurance, 0.4% of the amount financed; title search, $360; and attorney's fees, $570. You plan to live in your home for at least four more years. Use the Mortgage Refinancing Worksheet to see if it makes sense to refinance your mortgage. (attached is chart) (a): What is your currently monthly mortgage (in…
hey, can you please solve this manual and not on excel? Thank you.
According to money.CNN.com, with mortgage rates near 35-year lows, you may be able to cut your payments sharply by refinancing your loan. To qualify for the best rates, you need a credit score of 740 or higher and usually at least 20% equity. Even if you have to settle for a higher rate, a new loan may save you money. The main consideration is whether you will live in your home long enough to offset the refinance closing costs. Your current mortgage payment is $1,558.50 per month, with a balance of $219,800. Suppose you have a chance to refinance at a certain bank with a 30-year, 5.75% mortgage. The closing costs of the loan are application fee, $80; credit report, $165; title insurance, 0.4% of the amount financed; title search, $360; and attorney's fees, $570. You plan to live in your home for at least four more years. Use the Mortgage Refinancing Worksheet to see if it makes sense to refinance your mortgage. A guided mortgage refinancing worksheet. The first line states "Step 1.…
Suppose you are in the market for a new car worth $18,000. You are offered a deal fo make a S1,800 down payment now and to pay the balance in equal end-of-month payments of $421.85 over a 48-month period. Consider the following situations:a.Instead of going through the dealer's financing, you want to make a down payment of $1,800 and take out an auto loan from a bank at 11.75% compounded monthly. What would be your monthly payment to pay off the loan in four years?b. If you were to accept the dealers offer, what would be the effective rate of interest per month charged by the dealer on your financing?
According to money.CNN.com, with mortgage rates near 35-year lows, you may be able to cut your payments sharply by refinancing your loan. To qualify for the best rates, you need a credit score of 740 or higher and usually at least 20% equity. Even if you have to settle for a higher rate, a new loan may save you money. The main consideration is whether you will live in your home long enough to offset the refinance closing costs. Your current mortgage payment is $1,678.50 per month, with a balance of $218,800. Suppose you have a chance to refinance at a certain bank with a 30-year, 5.75% mortgage. The closing costs of the loan are application fee, $80; credit report, $165; title insurance, 0.4% of the amount financed; title search, $360; and attorney's fees, $570. You plan to live in your home for at least four more years. Use the Mortgage Refinancing Worksheet to see if it makes sense to refinance your mortgage a) What is your currently monthly mortgage (in $)? $ (b) Using this…
Explain well with proper step by step Answer.
According to money.CNN.com, with mortgage rates near 35-year lows, you may be able to cut your payments sharply by refinancing your loan. To qualify for the best rates, you need a credit score of 740 or higher and usually at least 20% equity. Even if you have to settle for a higher rate, a new loan may save you money. The main consideration is whether you will live in your home long enough to offset the refinance closing costs. Your current mortgage payment is $1,658.50 per month, with a balance of $219,800. Suppose you have a chance to refinance at a certain bank with a 30-year, 5.5% mortgage. The closing costs of the loan are application fee, $80; credit report, $165; title insurance, 0.4% of the amount financed; title search, $360; and attorney's fees, $560. You plan to live in your home for at least four more years. Use the Mortgage Refinancing Worksheet to see if it makes sense to refinance your mortgage. Using this table, what is your new monthly mortgage payment (in $) if you…
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