You are considering buying a car (sticker price of $43,000) but need financing. The car dealership has offered you two loan options: Loan A requires a $1,750 downpayment with the remainder financed over 5 years with monthly payments based on a contractual rate of interest of 4.1%; Loan B requires no downpayment with the balance financed at zero percent over 4 years with monthly payments. If you opt for Loan A you are eligible for an immediate $3,000 rebate on the car, no rebate is offered on the zero percent financing deal. The market rate for the risks that you pose is 7.1%. The car has a market value of $36,000. Assume you have chosen Loan A and would like to pay it off three years into the transaction. How much would you have to pay to retire the debt? [Don't round interim calculations] Multiple Choice C O $15,756.18 $16.244.96 $17,465.14 $23,882.16 None of the above

You are considering buying a car (sticker price of $43,000) but need financing. The car dealership has offered you two loan options: Loan A requires a $1,750 downpayment with the remainder financed over 5 years with monthly payments based on a contractual rate of interest of 4.1%; Loan B requires no downpayment with the balance financed at zero percent over 4 years with monthly payments. If you opt for Loan A you are eligible for an immediate $3,000 rebate on the car, no rebate is offered on the zero percent financing deal. The market rate for the risks that you pose is 7.1%. The car has a market value of $36,000. Assume you have chosen Loan A and would like to pay it off three years into the transaction. How much would you have to pay to retire the debt? [Don't round interim calculations] Multiple Choice C O $15,756.18 $16.244.96 $17,465.14 $23,882.16 None of the above

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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your client wants to buy a new car. the financing terms are: sticker price: 100,000.00 usd cash discount of 21% or 48 monthly payements with no interest: calculate the effective annual rate that your client actually has to pay. you will need your financial calculator for this.
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When you graduate from college, you apply for and are offered a job that pays $1,900 per month. You have a student loan debt of $14,000 with a 4% interest rate. Answer parts a) through e) below. a) What should your maximum rent be to keep your Front-End DTI Ratio no higher than 29%? $ 551 (Round to the nearest dollar as needed.) b) What should your maximum student loan payment be to maintain a 37% Back-End DTI Ratio? $ 152 (Round to the nearest dollar as needed.) c) Use technology to determine how long it will take to pay off the loan using the payment from part b). 110 month(s) (Round to the nearest whole number as needed.) d) You want to pay off the loan in a more reasonable amount of time, 72 months. Use technology to determine the amount that the loan payment needs to be to meet this goal. $ 219 (Round to the nearest dollar as needed.) e) If you increase the loan payment to the amount calculated in part d), what minimum income level do you need to maintain your present lifestyle…
Suppose that you decide to borrow $35,000 for a new car. You can select one of the following loans, each requiring regular monthly payments: Installment Loan A: three-year loan at 6% Installment Loan B: five-year loan at 9%. Find the monthly payments and the total interest for Loan A. Find the monthly payments and the total interest for Loan B. Compare the monthly payments and total interest for the two loans. Use this formula to find the monthly payments:
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After deciding to get a new car at Ehlert Motors, your options are to purchase it with a three-year loan or to lease it for three years. The car you wish to buy costs $38,600. the dealer has a special loan financing offer: if you make a 10% down payment, you qualify for a special 0.96% APR compounded monthly (much lower than the competitive market 3.6% APR compounded monthly). If you purchase the car with the loan, you expect to be able to sell it in 3 years for $22,000. If you lease the car, it has no residual value (you must turn it in at the end of the lease). To make you indifferent between purchasing and leasing, what would the present value of all lease payments need to be? Because we weren't given lease information, I believe we just need to calculate the PV of the purchasing option.
You have been shopping for a new home. You have a choice of financing.You can choose either a $200,000 mortgage at 4.75 percent for 30 years, ora $200,000 mortgage at 3.5 percent for 15 years.a. Calculate the monthly payment for both the 30-year and 15-yearmortgages.b. Calculate the amount of interest paid over the life of the loan for bothmortgages.c. Choose the best mortgage for you and explain your answer.

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