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 a 6% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 months? Do not round intermediate calculations. Round your answers to the nearest cent. Financed for 48 months: $   Financed for 60 months: $

Q: You want to bought a car for $8,000. You have monthly wage is $1,800 of which $600 will be saved for…

A: The term "annuity" refers to a contract created and offered by financial institutions with the goal…

Q: You want to buy a car, and a local bank will lend you $25,000. The loan will be fully amortized over…

A: Monthly Loan Payment = PV*(r*(1+r)n)((1+r)n-1)  where: PV is the present value of the loan r is the…

Q: You are looking to buy a car and can afford to pay $210 per month. If the interest rate on a car…

A: Loan amount refers to an amount that is being borrowed by the borrower from the lender at a…

Q: Suppose you can afford to pay $ 250 a month for 8 years towards a new car with no down payment. If…

A: Given details are : Monthly payment = $250 Time period = 8 years Interest rate = 4.75% We need to…

Q: are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle is $93,500…

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

Q: Someone offers an investment opportunity that will pay you $725 at the end o next 17 years. How much…

A: Maximum value is the present value of cash flow from the annuity based on the time value of money…

Q: You have saved $4,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv], [type])…

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: secures financing for the balance at the rate of 9%/year compounded monthly. (Round your answers to…

A: Answer : price of new car =$16000 Less : Down payment = $16000*25% = $4000 Amount financed = $16000…

Q: suppose that you decide to borrow $15,000 for a new car. you can select one of the following loans,…

A: a.Loan ALoan Amount (pv) = $15,000Interest Rate (rate) = 5.9%Time Period = 3 YearsNumber of Payments…

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: We have offered to contribute $6,200 at the time of your purchase. The car plan to buy will cost…

A: Annuity means a series of finite number of payments which are the same in size and occur in the same…

Q: Solve the following problems. Round your results to the nearest cent as needed. You need a loan to…

A: P = $24,200 (loan amount),(monthly interest rate),n=6×12 (number of months in 6 years).

Q: You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: The time value of money is a concept in finance that considers the effect of compounding into…

Q: Months Financed Maximum Car Price 48 60 f you finance the car for a shorter period of time, you can…

A: To determine the maximum car price, we need to find the PV of the monthly payment and then add the…

Q: After reviewing your budget, you can afford to pay $720 per month for a new car. You are looking for…

A: Loan is a financial contract engaging a lender who provides money or assets to a borrower who agrees…

Q: You want to buy a new sports coupe for $64,987, and the finance office at the dealership has quoted…

A: Amortization is the systematic repayment of loan and interest for a decided period of time. Each…

Q: You have saved $4,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: Financed for 48 months: $17,267.77Financed for 60 months: $19,621.38

Q: You want to buy a car, and a local bank will lend you $25,000. The loan will be fully amortized over…

A: Compound = n = Monthly = 12Present Value = pv = $25,000Time = t = 5 * 12 = 60Interest Rate = r = 9 /…

Q: your client wants to buy a new car. the financing terms are: sticker price: 100,000.00 usd cash…

A: Upfront purchase price = $ 100,000 - 21% discount = 79,000Hence, PV = - 79,000Otherwise under…

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: If you want to buy a car, and you can afford a monthly payment of $425, how large of a loan can you…

A: Using excel PV function to get the loan amount

Q: You want to buy a new sports coupe for $75,200, and the finance office at the dealership has quoted…

A: Loan is a financial obligation that is repayable in the future. A loan is repayable according to the…

Q: payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 me…

A: The monthly payment consist of payment of principal and interest to be paid over the life of…

Q: You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: Given data; down payment amount = $3000 monthly payment = $400 Annual interest rate = 12% number of…

Q: You want to buy a new car and have saved a down payment of $2000. The car that you want costs…

A: To solve the question, we first need to determine the amount for which the monthly payments has to…

Q: You want to buy a new sports coupe for $77,500, and the finance office at the dealership has quoted…

A: Compound = n = Monthly = 12Present Value = pv = $77,500Interest rate = r = 5.9 / 12Time = t = 48

Q: You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: We take loans to buy expensive things like a car, a yacht, etc. which we otherwise are not capable…

Q: Suppose you want to save in order to purchase a new car. Take the APR to be 3.6%. If you deposit…

A: Future value of annuity The future value of annuity refers to the total value of the investment at…

Q: Suppose that you borrow $17,000 for three years at 8% toward the purchase of a car. Use PMT= The…

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

Q: You want to buy a car, and a local bank will lend you $35,000. The loan will be fully amortized over…

A: Monthly loan payment can be calculated by using excel function of PMT-Excel function of PMT…

Q: You want to by a boat and can afford payments of $350 per month for six years. The monthly interest…

A: a. given, A=$350 n=6 r=0.5% m=12 PVA=A×1-11+rn×mr=$350×1-11+0.5%12×60.5%=$21,118.83 answer:…

Q: Give typing answer with explanation and conclusion you want to borrow $71,400 from your local bank…

A: The idea of the time value of money (TVM) holds that a quantity of currency is valuable currently…

Q: You wish to buy a car at a cost of $45,000. Ford Credit will finance the car at 3.9%/year over 48…

A: The two proposals can be made indifferent if their present worth will be same after offering the…

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.