You want to buy a car and have negotiated a sale price of $50,000. You canget a loan from your local bank at a rate of 6% annually for 6 years. What isyour MONTHLY payment?Reference the below formulas when solving the problem above:PV = FV / (1+r)^tFV = PV(1+r)^tFVA = PMT(((1+r)^t) -1) / rFVA =PMT((1+(r/12)^t(12))-1)/(r/12)PVA = PMT(((1-(1+r)^-t) / r))PVA = PMT((1-(1+(r/12))^-t(12)))/(r/12)

Present value = pv = $50,000 Compound = monthly = 12 interest rate = r = 6 / 12 = 0.5% Time = t = 6…

Answered: You want to buy a car and have…

You want to buy a car and have negotiated a sale price of $50,000. You can get a loan from your local bank at a rate of 6% annually for 6 years. What is your MONTHLY payment?

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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Concept explainers

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.

Question

You want to buy a car and have negotiated a sale price of $50,000. You can
get a loan from your local bank at a rate of 6% annually for 6 years. What is
your MONTHLY payment?
Reference the below formulas when solving the problem above:
PV = FV / (1+r)^t
FV = PV(1+r)^t
FVA = PMT(((1+r)^t) -1) / r
FVA =
PMT((1+(r/12)^t(12))-1)/(r/12)
PVA = PMT(((1-(1+r)^-t) / r))
PVA = PMT((1-(1+(r/12))^-t(12)))/(r/12)

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