You currently have two loans outstanding: a car loan and a student loan. The car loan requires that you pay $394 per month, starting next month for 35 more months. Your student loan is requires that you pay $101 per month, starting next month for the next 95 months. A debt consolidation company gives you the following offer: It will pay off the balances of your two loans today and then charge you $540 per month for the next 40 months, starting next month. If your investments earn 4.52% APR, compounded monthly, how much would you save or lose by taking the debt consolidation company's offer? If you lose, state your answer with a negative sign (e.g., -25,126)

You currently have two loans outstanding: a car loan and a student loan. The car loan requires that you pay $394 per month, starting next month for 35 more months. Your student loan is requires that you pay $101 per month, starting next month for the next 95 months. A debt consolidation company gives you the following offer: It will pay off the balances of your two loans today and then charge you $540 per month for the next 40 months, starting next month. If your investments earn 4.52% APR, compounded monthly, how much would you save or lose by taking the debt consolidation company's offer? If you lose, state your answer with a negative sign (e.g., -25,126)

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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Suppose that you take out an unsubsidized Stafford loan on September 1 before your junior year for $45004500 and plan to begin paying it back on December 1 after graduation and grace period 27 months later. The interest rate is 6.8%. How much of what you will owe will be interest?$Round your answer to the nearest cent.
Jane Zahrley’s request for a five-year automobile loan for $39,000 has been approved. Reston Bank will require equal monthly installment payments for 60 months. The bank tells Jane that she must pay a total of $5,500 in finance charges. What is the loan’s APR?
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You are purchasing a new car for $27,600. The dealership offers you three options: 0% financing: 0 down and 0% financing for 48 months. Rebate: 0 down. If you choose the rebate, you will need to secure a loan for the balance at your local bank. Down payment: Make a down payment of 5% or more and get financing at 1.5% compounded monthly for 48 months. The rebate offer is $1900, and you can obtain a car loan at your local bank for the balance at 2.03% compounded monthly for 48 months. If you choose the rebate, what is your monthly payment? $ _______ . Round to the nearest dollar.
You have an outstanding student loan with required payments of $500 per month for the next four years. The interest rate on the loan is 9.00% APR (monthly). You are considering making an extra payment of $200 today (i.e., you will pay an extra $200 that you are not required to pay). If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? What effective rate of retum (expressed as an APR with monthly compounding) have you eamed on the $200? (Note: Be careful not to round any intermediate steps less than six decimal places.) If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? The final payment is $ (Round to the nearest cent.)
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