You are trying to decide between two mobile phone carriers. Carrier A requires you to pay $195 for the phone and then monthly charges of $62 for 24 months. Carrier B wants you to pay $90 for the phone and monthly charges of $68 for 12 months. Assume you will keep replacing the phone after your contract expires. Your cost of capital is 4.4% APR, compounded monthly. Based on cost alone, which carrier should you choose?
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- You need a loan of $110,000 to buy a home. Calculate your monthly payments and total closing costs for each choice below. = Choice 1: 15-year fixed rate at 4% with closing costs of$1600 and no points. Choice 2: 15-year fixed rate at 3.5% with closing costs of$1600 and 3 points. What is the monthly payment for choice 1? $_______ (Do not round until the final answer. Then round to the nearest cent as needed.) What is the monthly payment for choice 2? $_____ (Do not round until the final answer. Then round to the nearest cent as needed.) What is the total closing cost for choice 1? $_____ What is the total closing cost for choice 2? $_____ Why might choice 1 be the better choice? A.The monthly payment is lower. B. The closing costs are lower. C. The monthly payment is higher. D. The closing costs are higher. Why might choice 2 be the better choice? A. The closing costs are lower. B. The monthly payment is lower C. The monthly payment is higher. D. The closing…You need a loan of $175,000 to buy a home. Calculate your monthly payments and total closing costs for each choice below. Briefly discuss how you would decide between the two choices. Choice 1: 30-year fixed rate at 7% with closing costs of $1400 and no points. Choice 2: 30-year fixed rate at 6.5% with closing costs of $1400 and 2 points. What is the monthly payment for choice 1? What is the monthy Payment for choice 2? What is the closing paymennt for choice 1? What is the closing paymennt for choice 2?← You need a loan of $150,000 to buy a home. Calculate your monthly payments and total closing costs for each choice below. Briefly discuss how you would decide between the two choices. Choice 1: 20-year fixed rate at 6% with closing costs of $2900 and no points. Choice 2: 20-year fixed rate at 5.5% with closing costs of $2900 and 4 points. What is the monthly payment for choice 1? A (Do not round until the final answer. Then round to the nearest cent as needed.)
- You wish to buy a $10,000 dining room set. The furniture store offers you a three-year loan with an 11 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the consequences of such a decision be?Suppose that you have decided to buy a certain car that costs $28,950, including taxes and license fees. The dealership gives you two financing options: 1) Option A: The dealership takes $800 off the price of the car. You must make a down payment of $2000 and can finance the rest at 2.99% APR for 72 months. a) How much will you be financing? b) How much will your monthly payments be under this option? (Round to the nearest dollar.) c) How much total money will you pay under this option? (Don’t forget to include your down payment.) 2) Option B: The dealership takes $1000 off the price and 0% financing for 36 months. a) How much will you be financing? b) How much will your monthly payments be under this option? (Round to the nearest dollar.) c) How much total money will you pay under this option? 3) Would you choose option A or option B? Why?You are assiting a newly hired employee. You begin explaning the process of utilizing excel to finance properties. Consider the following. A realator has a house on sale for $640,000. If possible you believe you can finance the home for $300,000 for 20 years at a 3% interest rate. What would the monthly principle and interest payment be for the acquird loan? Calculate using the PV funtion in excel. How would you caluclate this in Excel using the PV function? Rate: Nper: Pmt: FV: Type:
- 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?A computer dealer offers(a) to lease a system to you for $50 permonth for two years. At the end of two years, you have the option to buy the system for $500. You will pay at the end of each month.(b) He will sell the same system to you for $1,200 cash.If the going interest rate is 12%, which is the better offer (a) or (b)?Suppose you decide to take the tour now and use a 15% credit card for the purchase. A. How many months will it take to pay off the 6,000 for the tour if you make a fixed payment of 4% of the original balance? B. How much will you pay in interest if you make the fixed payment described in A. C. How many months will take to pay off the 6,000 tour if you make the minimum payment, assuming the minimum is 4% of the outstanding balance? D. How much will you pay in interest if you make only the minimum payment?
- A buyer is considering purchasing a 10-acre parcel in Peoria, Arizona for economic development. The parcel has a sales price of $720,000. The buyer agrees with the seller for purchasing the property with 15% down up front and paying off the balance in 12-months. If a bank is willing to provide 3% annual interest, compounded monthly, how much should the monthly deposit be into that account to pay off the desired balance to the seller?Your firm is considering the purchase of equipment from two suppliers. Supplier A requires payment of $5500 today for each machine. Supplier B requires a payment of $5600 in 6-months for each machine. If you earn 5% APR compounded monthly, and if both suppliers deliver the exact same machines today and have same warranty, etc... which supplier is offering the better financial terms to your firm? A) Supplier A because $5500 > $5600 B) Supplier A, because the FV of $5500 is $5638.94 which is greater than $5600 C) Supplier B, because the PV of $5600 is $5462, which is less than $5500 D) Supplier B, because the PV of $5600 is $5462, which is less than $5600you are buying new television. from past experience you estimate future repair cost as P500 during the first year, P1800 during the second year, P2700 during the third year and P3700 during the fourth year. The dealer offers to sell you a four year repair contract for P7000. You require at least 6% interest rate on your investments. should you invest in the repair contract?