Question

In: Finance

Tim Smith is shopping for a used luxury car. He has found one priced at $30,000....

Tim Smith is shopping for a used luxury car. He has found one priced at $30,000. The dealer has told Tim that if he can come up with a down payment of 5,000​, the dealer will finance the balance of the price at a 6% annual rate over
3years (36 months). 
a.  Assuming that Tim accepts the​ dealer's offer, what will his monthly​ (end-of-month) payment amount​ be?
b.  Use a financial calculator or spreadsheet to help you figure out what​ Tim's monthly
payment would be if the dealer were willing to finance the balance of the car price at an annual rate of 4.0​%?
a. ​ Tim's monthly​ (end-of-month) payment amount is_______
​(Round to the nearest​ cent.)
b. ​ Tim's monthly payment, if the dealer were willing to finance the balance of the car price at an annual rate of 4.0%​, would be ________(Round to the nearest​ cent)

Solutions

Expert Solution

SOLVED USING FINANCIAL FORMULA AS WELL AS EXCEL


Related Solutions

Tim Smith is shopping for a used luxury car. He has found one priced at $...
Tim Smith is shopping for a used luxury car. He has found one priced at $ 27000. The dealer has told Tim that if he can come up with a down payment of ​$5 600​, the dealer will finance the balance of the price at a 7​% annual rate over 3 years ​(36 ​months). ​(Hint: Use four decimal places for the monthly interest rate in all your​ calculations.) a.  Assuming that Tim accepts the​ dealer's offer, what will his monthly​...
Tim Smith is shopping for a used luxury car. He has found one priced as $40,000....
Tim Smith is shopping for a used luxury car. He has found one priced as $40,000. The dealer has told Tim that if he can come up with a down payment of ​$7,500​, the dealer will finance the balance of the price at a 55​% annual rate over 5years ​(60 ​months).  ​(Hint: Use four decimal places for the monthly interest rate in all your​ calculations.) a.  Assuming that Tim accepts the​ dealer's offer, what will his monthly​ (end-of-month) payment amount​...
Monthly loan payments  Personal Finance Problem   Tim Smith is shopping for a used luxury car. He...
Monthly loan payments  Personal Finance Problem   Tim Smith is shopping for a used luxury car. He has found one priced at $30,000. The dealer has told Tim that if he can come up with a down payment of $6,300​, the dealer will finance the balance of the price at a 6​% annual rate over 3 years (36 months).  ​(Hint: Use four decimal places for the monthly interest rate in all your​ calculations.) a.  Assuming that Tim accepts the​ dealer's offer,...
Monthly loan payments: Personal Finance Problem    Tim Smith is shopping for a used luxury car. He...
Monthly loan payments: Personal Finance Problem    Tim Smith is shopping for a used luxury car. He has found one priced at $27,000. The dealer has told Tim that if he can come up with a down payment of ​$6,900​, the dealer will finance the balance of the price at a ​7% annual rate over 5 years ​(60 ​months). (Hint: Use four decimal places for the monthly interest rate in all your​ calculations.) a.  Assuming that Tim accepts the​ dealer's offer,...
Monthly loan payments  Personal Finance Problem   Tim Smith is shopping for a used luxury car. He...
Monthly loan payments  Personal Finance Problem   Tim Smith is shopping for a used luxury car. He has found one priced at $ 29,000. The dealer has told Tim that if he can come up with a down payment of ​$5,800​, the dealer will finance the balance of the price at a 7​% annual rate over 2 years ​(24 ​months).  ​(Hint: Use four decimal places for the monthly interest rate in all your​ calculations.) a.  Assuming that Tim accepts the​ dealer's...
Donald is in the market for a used car. He has found the same sports car...
Donald is in the market for a used car. He has found the same sports car at two different dealerships and is now considering which dealer he should purchase the car from. Dealer 1 requires Donald to get the loan through their lending department. Dealer 1 has told Donald that because they do their own financing, they can get Donald the very best loan possible and Donaldwill only have to pay $365 per month for 60 months (5 years). Dealer...
Paul is in the market for a used car. He has found the same sports car...
Paul is in the market for a used car. He has found the same sports car at two different dealerships and is now considering which dealer he should purchase the car from. Dealer 1 requires Paul to get the loan through their lending department. Dealer 1 has told Paul that because they do their own financing, they can get Paul the very best loan possible and Paul will only have to pay $315 per month for 48 months (4 years)....
5. You are out shopping for a new car. You have found a Toyota Sienna priced...
5. You are out shopping for a new car. You have found a Toyota Sienna priced at 34,400. The dealer has told you that if you can come up with a down payment of 3,300, he would be willing to finance the balance at an EAR of 5.65%. for 4 years. You come back home and after doing the math you find that the monthly payment is beyond your means. At this time, you can only afford a monthly payment...
Stan Moneymaker has been shopping for a new car. He is interested in a certain? 4-cylinder...
Stan Moneymaker has been shopping for a new car. He is interested in a certain? 4-cylinder sedan that averages 29 miles per gallon. But the sales person tried to persuade Stan that the? 6-cylinder model of the same automobile only costs $2,500 more and is really a? "more sporty and? responsive" vehicle. Stan is impressed with the zip of the?6-cylinder car and reasons that ?$2,500 is not too much to pay for the extra power. How much extra is Stan...
A used car salesperson claims that the probability of he selling a used car to an...
A used car salesperson claims that the probability of he selling a used car to an individual looking to purchase a used car is 70% and this probability does not vary from individual to individual. Suppose 5 individuals come to speak to this salesperson one day. If his belief is correct, The probability (to 4 decimal places) that he will sell a car to the first individual he speaks to is ______ The probability (to 4 decimal places) that he...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT