You can lease a vehicle today for 36 months. The dealer will guarantee a residual value of $10,000. If the cash price of the car is $38,000, and the financing is priced at 8.75%, what would be your monthly payment?

Q: Your car dealer is willing to lease you a new car for $180 a month for 36 months. Payments are due…

A: We will use the concept of time value of money to solve this question.   The monthly payments of…

Q: You want to buy a new sports car from Muscle Motors for $54,000. The contract is in the form of a…

A: Annuity is a series of cash flow occurring at regular intervals like each month, each quarter etc.…

Q: After deciding to get a new car, you can either lease the car or purchase it with a three-year loan.…

A: A loan is a financial instrument that involves the lending of money by one or more individuals,…

Q: You are at a dealership considering the purchase of a car that would cost $34,000 if paid for in…

A: We shall use Excel's =NPER formula to calculate the total payments that would be required under the…

Q: You are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle is…

A: Balloon payment is the final payment made at the end of loan to close and settle the loan and close…

Q: A Chevrolet Sonic Hatchback costs $14,375.00. With a 7% down payment, you can have an amortized loan…

A: Initial cost of car = $14,375 Down payment = initial cost of car * 7% = 14,375 * 0.07 = $1006.25…

Q: What monthly payment will be required for the individual to make if the car is financed over a…

A: Compound interest is the amount of interest paid on interest which will grow the interest on loans…

Q: You purchase a living room set for $10,000. they offer a loan option of 12% compounded monthly for…

A: The monthly payment will depend upon the loan balance, interest rate, and time period.

Q: /hat is the project's discounted payback period?

A: In the payback period method, the time value of money is not taken into consideration in order to…

Q: You are saving to buy a new car in two years.  You currently have $5000 in an account that pays 4%…

A: We need to use present value formula below to calculate amount required today in account.PV…

Q: You want to buy a new sports car from muscles motors for $79000. The contract is in the form of a…

A: The PMT function or concept can be used to determine the periodic payments required to accumulate a…

Q: You are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle is $94,…

A: To find the balloon payment for the Tesla Model X SUV:- Calculate the monthly interest rate using…

Q: You are negotiating to buy a new car with a car salesman at a local dealer. You have negotiated the…

A: Loans are paid by monthly payments and these monthly payments carry the payment for interest and…

Q: A new furniture set costs $ 2800. If you make a down payment of $ 300 and finance the rest at a rate…

A: Furniture cost = $2800 Down payment = $300 Loan amount (P) = $2800 - $300 = $2500 Monthly interest…

Q: You are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle is…

A:

Q: You want to buy a $23,000 car. You can make a 10% down payment, and will finance the balance with a…

A: A loan refers to a contract between a borrower and a lender where a sum is exchanged on the promise…

Q: Your uncle will sell you his bicycle shop for P800,000, with "seller financing," at a 10.0% nominal…

A: Loan is a value which is taken from external sources like banks and this amount is repaid in fixed…

Q: You want to buy a car. The loan amount will be $29,000. The company is offering a 4% interest rate…

A: Annuity is a series of equal periodic payments for a specified period.With periodic rate (r), period…

Q: You want to buy a car for $25000 that has to be paid in 5 years. If the car dealer agrees to finance…

A: Working note:

Q: You want to buy a $27,000 car. The company is offering a 4% interest rate for 48 months (4 years).…

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Q: You want to buy a new sports coupe for $132,500, and the finance office at the dealership has quoted…

A: The effective annual rate is the effective interest rate applicable on the loan after taking into…

Q: You want to buy a car. The loan amount will be $25,000. The company is offering a 4% interest rate…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: Your uncle will sell you his bicycle shop for $220,000, with "seller financing," at a 5.0% nominal…

A: The lump-sum amount which is termed as last payment and is done at the end of the loan period is…

Q: You want to buy a $15,000 car. The company offering a 3% interest rate for 60 months (5 years). What…

A: To calculate the monthly payment we will use the below formula   Monthly payment = PV/[1-(1+r)-n]/r…

Q: You would like to purchase a car that costs $47000 at 7% APR for 3 years. What is your monthly…

A: Cost (PV) = $47000 Interest rate = 7% Monthly interest rate (r) = 7%/12 = 0.583333333333333% Period…

Q: You've just bought a new flat-screen TV for $4000 and the store you bought it from offers to let you…

A: Solution:-When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: You are saving to buy a new car in two years.  You currently have $5000 in an account that pays 4%…

A: The FV of an investment refers to the combined worth of the cash flows of the investment at a…

Q: You are considering purchasing a new automobile with the upfront cost of $26,000 or leasing it from…

A: Present value = pv = $26,000 Compound = Monthly = 12 Interest rate = r = 2.80 / 12 % Time = t = 5 *…

Q: You want to buy a $20,000 car. The company is offering a 2% interest rate for 60 months (5 years).…

A: Variables in the question:PV=Loan amount=$20000Rate=2%N=5 years

Q: You want to buy a $26,000 car. The company is offering a 2% interest rate for 36 months (3 years).…

A: Monthly payments are the periodic amounts that a loan borrower has to make on a regular basis in…

Q: You are ready to buy a house and you have $35,000 for a down payment and closing costs. Closing…

A: Excel formula.

Q: You have to buy a new copier. The cost of the copier is​ $2,075​, plus ​$410 per year in maintenance…

A:

Q: You want to buy a $29,000 car. The company is offering a 2% interest rate for 48 months (4 years).…

A: The monthly payment for an amortized loan can be determined using either a formula or the Excel…

Q: finance your new SUV with an auto loan of $38,000. This loan will b d compounding) at a 4% annual…

A: Auto loan=$38000Monthly interest rate=r=0.33%Period 3 years=36 months

Q: You want to but a $27,000 car. The company is offering a 3% interest rate for 60 months (5years).…

A: You want to but a $27,000 car. The company is offering a 3% interest rate for 60 months (5years).…

Q: You are looking to buy a car. You can afford $460 in monthly payments for four years. In addition to…

A: APR = 7.25% or 0.0725Monthly rate (r) = 0.0725 / 12 = 0.00604166666Monthly payment (PMT) =…

Q: You want to buy a new sports coupe for $75,300, and the finance office at the dealership has quoted…

A: The annual Percentage Rate shorts name is APR. It is a uniform means of quantifying the annual real…

Q: The present value price of a car you would like to purchase today is $17,990. You are approved for a…

A: In this question one has to solve the monthly payment. Monthly payment can either be found out by…

Q: Suppose you can afford $500 monthly payments and you will be able to pay $9000 as a balloon payment…

A: Balloon payments refer to the lump sum amount that is to be paid at the end of the period of the…

Q: You can afford to pay $15,000 at the end of each of the next 30 years to repay a home loan. If the…

A: Present value of annuity is the current worth of future annual cash flows over a period of time at a…

Q: You want to buy a new sports car from Muscle Motors for $47,000. The contract is in the form of an…

A: The calculation of the monthly payment can be performed using the present value of an annuity due…

Q: Suppose you want to buy a house today that costs $139022. The bank requires you to make a 20% down…

A: Solution:-When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.