Question

In: Finance

The original sale price of a car is $22,194.96. The required down payment is $1,410. The...

  • The original sale price of a car is $22,194.96. The required down payment is $1,410. The monthly payment a customer will pay on the note is $604.36 for a 3-year auto loan with a promotional financing rate at 2.99%? Given that information respond the Following

  • Based on the information from Q48, if a customer decides to skip the 2.99% financing promotion loan but take the cash rebate offer, how much cash does the customer need to pay to buy the new car? We assume that regular market interest rate for auto loan is 6%.

    Selected Answer:

    $21,213.64

    Answers:

    $19,264.02

    $19,865.92

    $21,213.64

    $21,275.92

  • Question 50

    0 out of 5 points

    Based on the information from Q48 and Q49, what’s the amount of cash rebate can the customer receive from the dealer if he decides to pay for the car with all cash instead of applying for the auto loan with the 2.99% low interest rate?

    Selected Answer:

    $1,521

    Answers:

    $1,521

    $2,329

    $919

    $3,930

Solutions

Expert Solution

Ques a) $21275.92

Ques b) $919

       23,167           21,276
Month Installment DCF @ 6% Present value
0           1,410 1               1,410
1              604 0.995024876                  601
2              604 0.990074503                  598
3              604 0.985148759                  595
4              604 0.980247522                  592
5              604 0.975370668                  589
6              604 0.970518078                  587
7              604 0.96568963                  584
8              604 0.960885204                  581
9              604 0.95610468                  578
10              604 0.951347941                  575
11              604 0.946614866                  572
12              604 0.94190534                  569
13              604 0.937219243                  566
14              604 0.932556461                  564
15              604 0.927916877                  561
16              604 0.923300375                  558
17              604 0.918706841                  555
18              604 0.91413616                  552
19              604 0.909588219                  550
20              604 0.905062904                  547
21              604 0.900560104                  544
22              604 0.896079705                  542
23              604 0.891621597                  539
24              604 0.887185669                  536
25              604 0.88277181                  534
26              604 0.87837991                  531
27              604 0.874009861                  528
28              604 0.869661553                  526
29              604 0.865334879                  523
30              604 0.86102973                  520
31              604 0.856746                  518
32              604 0.852483582                  515
33              604 0.84824237                  513
34              604 0.844022259                  510
35              604 0.839823143                  508
36              604 0.835644919                  505

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