Question
In: Finance
You need a new car and the dealer has offered you a price of $20,000, with...
You need a new car and the dealer has offered you a price of $20,000, with the following payment options: (a) pay cash and receive a $2000 rebate, or (b) pay a $5000 down payment and finance the rest with a 0% APR loan over 30 months. But having just quit your job and started an MBA program, you are in debt and you expect to be in debt for at least the next 2 1 2 years. You plan to use credit cards to pay your expenses; luckily you have one with a low (fixed) rate of 15% APR (monthly). Which payment option is best for you?
Solutions
Expert Solution
Present Value of Option A=18000
Present Value of Option B=5000+15000/30*1/(15%/12)*(1-1/(1+15%/12)^30)=17444.45312
Option B is best
jeff jeffy answered 2 years agoRelated Solutions
You need a new car and the dealer has offered you a price of $20,000, with...
You need a new car and the dealer has offered you a price of
$20,000, with the following payment options: (a) pay cash and
receive a $2,000 rebate, or (b) pay a $5,000 down payment and
finance the rest with a 0% APR loan over 30 months. But having just
quit your job and started an MBA program, you are in debt and you
expect to be in debt for at least the next 2 ½ years. You plan to...
you have reached an agreement with an auto dealer regarding a new car. She has offered...
you have reached an agreement with an auto dealer regarding a
new car. She has offered you a trade-in allowance of $7 000 on your
old car for a new one that she has “reluctantly” reduced to only
$32 000 (before trade-in). She has further agreed upon a contract
that requires you to pay $543.56 each of the next 60 months,
beginning one month from today. What is your interest rate,
expressed as an annual percentage? Give your answer to...
You are saving money to buy a Car. You will need $20,000 as the price of...
You are saving money to buy a Car. You will need $20,000 as the
price of the car today. If you can make a down payment now of $8000
, and want to pay the rest by installments, A. how much each
deposit per month should be if you want to pay the rest of the
amount in 24 months if the interest rate on the deposit is 6% per
year? B. If you can deposit $664 per month how...
Two dealers compete to sell you a new car with a list price of $42000. Dealer...
Two dealers compete to sell you a new car with a list price of
$42000. Dealer A offers to sell it for $40000 if you pay cash.
Dealer B offers to sell it to you for $44000 with a "0-percent
financing" option: you will have to pay 48 equal monthly payments
of $916.67. That is to say, Dealer B offers:
48×916.67=44000
Assume that the first monthly payment is one month after you
take possession of the car.
(a) Suppose that...
You are considering buying a sports car with a list price of $99,000. The dealer has...
You are considering buying a sports car with a list price of
$99,000. The dealer has offered you two payment alternatives: - You
can get a $9,000 discount if you pay cash today. - You can buy the
car for the list price of $99,000. You need to make a down payment
of $39,000. The remainder $60,000 is a "zero-interest loan" to be
paid back in equal installment over 36 months. Alternatively, your
bank is willing to give you a...
You are negotiating to buy a new car with a car salesman at a local dealer....
You are negotiating to buy a new car with a car salesman at a
local dealer. You have negotiated the price to $35,000. You have
$5,000 to put towards the down payment and plan to get a loan for
the rest. If you can get an annual interest rate of 11 percent APR
(with monthly compounding) over a 5-year period, what would be your
monthly payment? Round it to two decimal place (cents), e.g.,
234.56.
You are negotiating to buy a new car with a car salesman at a local dealer....
You are negotiating to buy a new car with a car salesman at a
local dealer. You have negotiated the price to $31,000. You have
$3,000 to put towards the down payment and plan to get a loan for
the rest. If you can get an annual interest rate of 5 percent APR
(with monthly compounding) over a 5-year period, what would be your
monthly payment? Round it to two decimal place (cents)
1. You decide to buy a new car. You negotiate with the dealer and get the...
1. You decide to buy a new car. You negotiate with the dealer
and get the car for $40,000. What will be your monthly payment if
you finance the purchase through your bank with a 6-year, 11% auto
loan (assume no down payment).
a. What if you made a down payment of $4,000? What would be the
monthly payment for the car?
A car company has offered to sell you a car for $15,000. You are required to...
A car company has offered to sell you a car for $15,000. You are
required to make a $3,000 down payment and weekly payments of $200
(first payment due next week) for 3 years. What is the effective
annual rate (EAR) on this loan?
You would like to buy a new car that costs $25,000. The dealer offers you a...
You would like to buy a new car that costs $25,000. The dealer
offers you a 3-year loan at an 8% interest rate, and because that
rate is higher than market rates they offer to lower the price by
$2,000. Assuming you make the required payment, should you accept
his offer or seek alternative financing at the 3% rate?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- explain how Texas Health Resource and Intel IT department complied with computer ethics?
- What is the signed decimal equivalent of the following signed-magnitude binary value? 11101010.1001 What is the...
- For each of the following situations provide the type of variable(s) that you would use to...
- C++ Text message decoder Use getline() to get a line of user input into a string:...
- Research aspects of the case; Janus vs. AFSCME. Know the type of union being discussed. Detail...
- When have you seen extremely creative tactics used in a communications campaign? Any successes? Any failures?
- What is the unsigned hexadecimal equivalent of the following unsigned octal value? Do NOT include in...
ADVERTISEMENT