Your brother has decided to purchase a new automobile with a hybrid-fueled engine and a six-speed transmission. After the trade-in of his present car, the purchase price of the new automobile is $30,000. This balance can be financed by the auto dealership at 2.9% APR and payments over 48 months. Compounding of interest is monthly. Alternatively, he can get a $2,000 discount on the purchase price if he finances the loan balance at an APR of 8.9% over 48 months. Should your brother accept the 2.9% financing plan or accept the dealer’s offer of a $2,000 rebate with 8.9% financing?

Q: George buys a car every 6 years for P18,000. He trades in his current car to count as the 20%…

A: Given information: George: Price of car : 18,000 Down payment : 20% Interest rate : 12% Time period…

Q: You decide to use $10,000 from your combined accounts to pay down your student loan, and use the…

A: A mortgage is a kind of loan that a lender or financial institution offers to people or companies to…

Q: You need to borrow $12,000 to buy a car, so you visit two banks and are given two alternatives. The…

A: Loan is a contract between lender and borrower where lender provide funds to borrower which repaid…

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: 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 want to buy a new car after your graduation. The price of the car is $20,000. The car dealer…

A: Monthly Payment  = P * r * [{(1+r)n }/{1+r)n -1}] where P = Prinicipal borrowed = Car price - down…

Q: You are deciding to buy a car to commute to work given the comparatively low interest of 6% per…

A: A loan is a debt arrangement that provides financial assistance to a person to full fill a specific…

Q: Dennis Lamenti wants to buy a new car that costs $15,177.57. He has two possible loans in mind. One…

A: In Add-on loan calculation for interest, the Principal and the total interest which is due is…

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: Erika is weighing her options for transportation.  She’s narrowed them down to the following: Option…

A: Therefore, the monthly payment for option A is $314.71.

Q: Erika is weighing her options for transportation. She's narrowed them down to the following: Option…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

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: Khiel wants to buy a car that costs $10,000, plus an extra 13% HST for a total price of $11,300. The…

A: Solved using Financial Calculator  1) Monthly payment to be made Pv = 11,300 N = 8 Years * 52 weeks…

Q: Maria and John decide to shop for furnishings for the new house.  They choose items that amount to…

A: Computation:

Q: Dennis Lamenti wants to buy a new car that costs $15,326.72. He has two possible loans in mind. One…

A: In this question, we have to find out the monthly payment of loan

Q: Sarah negotiated a price of $25,250.00 for a new Toyota Camry Hybrid Sedan. She is prepared to give…

A: Interest refers to the amount of money charged by a lender to a borrower for the use of borrowed…

Q: Angela Montery has a five-year car loan for a Jeep Wrangler at an annual interest rate of 5.7% and a…

A: The computation of payoff of the loan is as follows:

Q: Derek would like to save for a down payment on the purchase of a new SUV in 24 months. The targeted…

A: Down payment = $15,000Monthly interest rate = 0.875%Number of months = 24 months

Q: After starting your full - time job out of college, you decide to buy a new car for $85,000. Create…

A: Car cost = $85,000Number of payments = 84Discount rate = 6.5%To find: Amount owed after the 75th…

Q: Maria and John decide to shop for furnishings for the new house.  They choose items that amount to…

A: Formula for simple interest  Future value =Principal + interest rate x number of years

Q: You are considering purchasing a car with a sticker price of $50,000 (nonnegotiable with no down…

A: The amortization of loan refers to systematic, equal and regular repayment of loan. The instalment…

Q: The effective interest rate to the nearest percent for the financing arrangement for the five annual…

A: The effective rate of interest, also known as the effective annual rate (EAR) or annual equivalent…

Q: You are considering buying a new car worth $I5,000. You can finance the car either by withdrawing…

A: The present worth an investment is based on the time value of money concept. The present value of…

Q: You are planning to buy an used car from a local dealer. The list price of the car is $12,000. If…

A: List Price of Car = $12,000Down Payment = $5,500Cash cost of car = $11,000Bank Interest rate =…

Q: A buyer is considering purchasing a 10-acre parcel in Peoria, Arizona for economic development. The…

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: at minimum down payment must Asher make to keep his monthly payment at or below $500? und your…

A: Monthly payment of loan includes the payment of principal and interest payment that goes on changing…

Q: Rajesh would like to buy his first car and the one he has his eye on is $25,000, plus an extra 13%…

A: Solution:-  When a loan is taken, it can either be repaid as a lump sum payment or in instalments.…

Q: You can afford to pay $560 each month for a new car. The dealership offers you a 5-year loan at 6.4%…

A: Given:M = $560 (the amount you can afford each month) r = 6.4% per year = 6.4/12 = 0.5333% per month…

Q: You decide that you need $47,000 in 3 years to make a down payment on a house. You plan to make…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

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: Zachary Porter of Abilene, Kansas, is contemplating borrowing $10,000 from his bank. The bank could…

A: The provided information are: Amount being borrowed from bank = $10,000 Rate of interest (i) = 7% =…

Q: Sarah negotiated a price of $24,800.00 for a new Toyota Camry Hybrid Sedan. She is prepared to give…

A: Price of Sedan = $24,800Down Payment Rate = 15%Compound = Monthly = 12Time = t = 5 * 12 = 60Interest…

Q: You want to save for a new car so you make payments of $573 at the end of every month into the bank.…

A: Monthly Payment = mp = $573Annual Payment = ap = $1620Number of Monthly Payment = mn = 7 * 12 =…

Q: You consider financing the purchase of a new $159,900 sports car from a local luxury car dealership.…

A: Given:P = $159,900 r = 9.2% / 12 = 0.092 / 12 = 0.00767 (or 0.767% as a decimal) n = 3 years × 12…

Q: Barry Wood wants to buy a used car that costs $5000. He has two possible loans in mind. One loan is…

A: According to the given information, find the following monthly payment and total interest paid.

Q: Rick wishes to purchase a new car and can afford monthly payments of up to $275 per month. Finance…

A: Time value tells the value received today by an individual is of more worth than the exact amount…

Q: Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him…

A:

Q: nnis Lamenti wants to buy a new car that costs $15,326.72. He has two possible loans in mind. One…

A: In this question, we have to find out the interest paid on loan by dealer and by bank

Q: A friend of yours bought a new sports car with a $4,500 down payment plus a $27,000 car loan that is…

A:

Q: Dolph can afford a monthly car payment of $418 for the next 5 years, with the first payment…

A: It is a case where the amount of loan to be borrowed by Dolph is to be calculated, based on his…

Q: Big Sean is buying a new truck from Willie’s Auto Sales, the dealer is providing the financing and…

A: Calculation of monthly payment: Answer: Monthly payment is $995.40

Q: Tom needs a car to commute to work and has found a suitable Honda Civic from a dealer for $8000. He…

A: Total is the amount of down payment and amount total paid in monthly payments that include payment…

Q: You decide to do some remodeling in the kitchen. Your parents agree to lend you the money, but you…

A: Simple interest per month is calculated at: = Principal * rate of interest * 1/12

Q: fter deciding to buy a new car, you can either lease the car or purchase it on a three- ear loan.…

A: Lease is a way to get the asset for a fixed time period by paying periodicals payments to other…

Q: Joan has a choice of purchasing a car for $20,000 with 9.7% interest cost to borrow and a 3 year…

A: Lease:The lessor, who is the property's owner, and the lessee, who is the renter, engage into a…

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.