In: Finance

Suppose you intend to purchase a new car after you graduate. You expect to put $5,000 down and finance the balance over a 5-year period. The maximum amount you are willing to pay each month is $600. What is the maximum price you can pay for the car in other words, how much you can afford to pay for the car, assuming an interest rate of 8% per year, compounded monthly?

You are a college student and you plan to purchase a new car
after you graduate and begin your first job. You want to start
saving for a down payment now on a new car in the future . You
decide to make monthly payment into a saving account, which earns
2.5% annual interest compounded monthly. You will calculate a
monthly payment into the saving account for each scenario.
A.To save $4,000 for 3 years.
B.To save $5,000 for 3...

You
are about to purchase a brand new car for $23.400. You have $14.400
to put down and will need to finance the rest. The dealership has
two options.
1) Full price of the car and a loan of 0% interest for 3
years.
2) $1000 off the price of the car (known as cash back) and a
loan for the rest with an interest rate of 5.9% for 3 years
Which is the better option? (you must show work...

After deciding to buy a new car, you can either lease the car or
purchase it on a two-year loan. The car you wish to buy costs
$36,000. The dealer has a special leasing arrangement where you pay
$101 today and $501 per month for the next two years. If you
purchase the car, you will pay it off in monthly payments over the
next two years at an APR of 5 percent. You believe you will be able
to...

You purchase an antique car today for $41,774
You expect the price of the car to rise by 4% per year for the
next 7 years.
What do you expect the price of the car to be in year 7?

You purchase an antique car today for $46,260
You expect the price of the car to rise by 6% per year for the
next 9 years.
What do you expect the price of the car to be in year 9?

7. After deciding to buy a new car, you can either lease the car
or purchase it
on a three-year loan. The car you wish to buy costs $44,000. The
dealer has a special
leasing arrangement where you pay $1,000 per month, at the
beginning of each month,
for the next three years. If you purchase the car, you will pay
it off in monthly payments
over the next three years at a 3.6% APR. You believe you will be...

Suppose you purchase a new car for $27,000. You do not have
money in your bank today but since you have just graduated from
UTSA and have a job with high five figure annual salary, you see no
problems in taking a five-year loan from your dealer. After looking
at your options, you agree to the following terms: 0% down payment
with 6.75% APR (compounded monthly). The loan must be paid back in
monthly payments over the five years. (Round...

Suppose that you have two alternatives to purchase a new Mini
Cooper. You must put $2500 down, and make payments of $387 per
month for 48 months, at the end of each month, or pay $19,000 cash.
The dealer's stated financing rate is 5.1% APR. If you pay cash for
the car, how much money are you saving (+) or losing (-) in
comparison with financing your purchase through the dealer? (Your
answer should be positive when saving money, negative...

Suppose that you have two alternatives to purchase a new Mini
Cooper. You must put $2500 down, and make payments of $419 per
month for 48 months, at the end of each month, or pay $19,000 cash.
The dealer's stated financing rate is 5.1% APR. If you agree to the
financing terms, how much money are you saving (+) or losing (-) in
comparison to paying cash in dollars and cents? (Your answer should
be positive when saving money, negative...

You are considering buying a new car for $37,000. If you
purchase the car you will pay $7,000 of the purchase price as a
down payment. Below are two options to choose from. Option 1: Pay
off the amount borrowed to purchase the car with a 5 year loan, and
the annual percentage rate (APR) will be 0%. Option 2: Receive a
$2,000 instant rebate. This will lower your loan amount. Pay off
the amount borrowed to purchase the car...

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