PFIN 7:STUDENT EDITION-MINDTAP (1 TERM)
7th Edition
ISBN: 9780357033647
Author: Billingsley
Publisher: CENGAGE L
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Question
Chapter 5, Problem 1FPE
Summary Introduction
To discuss: A plan to guide Person AD for buying a new car.
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Planning a new car purchase . Olivia Green has just graduated from college and needs to buy a car to commute to work. She estimates that she can afford to pay about $450 per month for a loan or lease and has about $2,000 in savings to use for a down payment . Develop a plan to guide her through her first car -buying experience , including researching car type , deciding whether to buy a new or used car , negotiating the price and terms , and financing the transaction
Choose A, B, C, or D. Martin’s number one financial goal is to buy a car. The first step he should take in making this consumer purchase is to
A :
evaluate whether he can afford to buy and own a car.
B :
get preapproval from his bank for a car loan so that he can negotiate more effectively with car dealers.
C :
research all the different types of cars that might meet his needs to determine their safety, reliability, and fuel economy.
D :
evaluate whether he needs a car and, if so, what type of car he needs.
REFLECTING
Should Jill
consider a payday
loan to purchase
the refrigerator?
Explain.
Hint
APR means annual
percent rate.
2. Jill is buying a new refrigerator. She cannot afford to pay
cash. Should she use a credit card or get a personal loan?
Justify your answer.
3. Liam, a taxi driver in Revelstoke,
wants to buy a new taxi. He was
approved for the loans in this chart.
a) What should Liam think about
when he chooses a loan?
should Choose the
Lost
Fixed
APR payments for
4 Apprenticeship and Workplace 11
secured
personal 5.5%
loan
auto loan
7.5%
b) Which loan should Liam choose? Explain why.
4 yr
6 yr
4. Hannah says that using payday loans and cash advances on
credit cards are bad choices for borrowing money. Do you
agree or disagree? Explain.
NEL
Chapter 5 Solutions
PFIN 7:STUDENT EDITION-MINDTAP (1 TERM)
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- When Molly adds all of her payments, how much will the car cost her?arrow_forwardYou want to buy a used car but don't have enough money to purchase it outright. Your parents suggest that you check around at local banks, credit unions, and savings and loans to compare the interest rate on a 36-month $2,000 loan for an older used car. 1. What is the lowest interest rate that is being charged to borrow money for a used car at a bank, credit union, and savings and loan? Include the interest rate and the name of the institution offering the loan. 2. Of the three options, which location has the lowest interest rate for a loan? Is this surprising given what you learned about these types of institutions? Why or why not?arrow_forwardREFLECTING Should Jill consider a payday loan to purchase the refrigerator? Explain. Hint APR means annual percent rate. F welding. He needs money 2. Jill is buying a new refrigerator. She cannot afford to pay cash. Should she use a credit card or get a personal loan? Justify your answer. 3. Liam, a taxi driver in Revelstoke, wants to buy a new taxi. He was approved for the loans in this chart. a) What should Liam think about when he chooses a loan? Choose a louh APR Loan secured personal loan auto loan 7.5% 5.5% b) Which loan should Liam choose? Explain why. Fixed payments for 4 yr 6 yr 4. Hannah says that using payday loans and cash advances on credit cards are bad choices for borrowing money. Do you agree or disagree? Explain.arrow_forward
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