Problem 6-41 Calculating Annuity Present Values [LO2]You want to borrow $87,000 from your local bank to buy a new sailboat. You can affordto make monthly payments of $1,550, but no more. Assuming monthly compounding.what is the highest rate you can afford on a 72-month APR loan? (Do not roundintermediate calculations and enter your answer as a percent rounded to 2 decimalplaces, e.g., 32.16.)Interest rate%

We need to use RATE function in excel to calculate APR on loan. The equation is: =RATE(NPER,PMT,-PV)

Answered: You want to borrow $87,000 from your…

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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You want to borrow $59,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $1,100 but no more. Assuming monthly compounding, what is the hughest rate you can afford on a 66-month APR loan? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places
Suppose you want to borrow $90,000 and you find a bank offering a 20-year loan with an APR of 5%. a. Find your regular payments if you pay n = 1, 12, 26, 52 times a year. b. Compute the total payout for each of the loans in part (a). c. Compare the total payouts computed in part (b). a. The payment for n = 1 would be $ The payment for n = 12 would be $ The payment for n = 26 would be $ The payment for n= 52 would be $ (Do not round until the final answer. Then round to the nearest cent as needed.)
You are looking to buy a car. You can afford $225 in monthly payments for five years. In addition to the loan, you can make a $500 down payment. If interest rates are 5.80 percent APR, what price of car can you afford (loan plus down payment)? Note: Do not round intermediate calculations and round your final answer to 2 decimal places.
Suppose you decide to buy a car for $25,485, including taxes and licensing fees. You saved $10,000 for a down payment and can get a five- year loan at 6.52%. Use the present value of an annuity formula to find the monthly payment. Round to the nearest cent as needed. -nt pmt 1- P = $218.99 O $303.13 O $498.88 O $8413.52
d You have decided to buy a car that costs $31,000. Since you do not have a big down payment, the lender offers you a loan with an APR of 6.27 percent compounded monthly for 7 years with the first monthly payment due today. What is the amount of your loan payment? Multiple Choice $294.91 $454.51 $456.89 $374.71 $293.38
Problems Saved Help Save You have just borrowed $250,000 to buy a condo. You will repay the loan in equal monthly payments of $2,011.56 over the next 30 years. a. What monthly interest rate are you paying on the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is the APR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. What is the effective annual rate on that loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) d. What rate is the lender more likely to quote on the loan? a. Monthly interest rate APR b. C. Effective annual rate d. What rate is the lender more likely to quote on the loan? Prev 3 of 12 Next > earch IN W
You are looking to buy a car. You can afford $370 in monthly payments for four years. In addition to the loan, you can make a $1,800 down payment. If interest rates are 9.00 percent APR, what price of car can you afford (loan plus down payment)? Note: Do not round intermediate calculations and round your final answer to 2 decimal places.
You want to buy a car and you want your payments to be $500 per month. You can finance the car for 1.5% interest for 6 years. How much are you able to borrow for the loan? Assume monthly compounding. Do not enter the negative sign from your calculator (if there is one) or the dollar sign. Round to two decimal places.
You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 34-year mortgage loan for 80 percent of the $3,240,000 purchase price. The monthly payment on this loan will be $15,700. What is the APR on this loan? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is the EAR on this loan? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

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