Question

You are buying a new car. You can choose any car you want, Determine what your monthly car payments will be. *Do not forget to include tax and interest rate* include maker, model, and year of car. include sticker price, APR, and tax rate. Show all the work for determing cost. include thorough explanation for how monthly payments were determined. Compare at least two different plans such as one with down payment versus one without.

Answer 1

The car chosen is Porsche Cayenne 2019.  

The sticker price is $67,750. Assuming that the tax rate is 6%, the final price = $67,750 * (1 + 6%) = $71,815

Let us say the APR is 7% for a 5-year loan.

Without down payment

The monthly payment is calculated using PMT function in Excel :

rate = 7%/12 (converting annual rate into monthly rate)

nper = 5 * 12 (5 year loan with 12 monthly payments each year)

pv = 71,815 (loan amount = final price)

PMT is calculated to be $1,422.02. This is the monthly payment

Withdown payment of $5,000

The monthly payment is calculated using PMT function in Excel :

rate = 7%/12 (converting annual rate into monthly rate)

nper = 5 * 12 (5 year loan with 12 monthly payments each year)

pv = 66,815 (loan amount = final price - down payment = 71,815 - 5,000)

PMT is calculated to be $1,323.02. This is the monthly payment