john boorrows $60,000 to buy a new car with a 0.25% interest rate per month. (...

john boorrows $60,000 to buy a new car with a 0.25% interest rate per month. ( no rate conversion needed) he agrees to pay off the loan in 36 equal end of month payments. The first payment will be made at the end of this month. A) what should be the monthly payment ? ( Round to Two decimal places) B) Create an ammortization table showing his payment, interest payment, principal payment, and loan balance over time. What is the Total Interest Payment of the loan over the 36 months ? C) what must the interest rate be so that the total interest he pays to the bank over the life of the loan is $5711.38? Round to the nearest two decimal places.

Expert Solution

1.
Monthly payment=PMT(0.25%,36,-60000)=1744.87

2.

Total Interest Payment=1744.87*36-60000=2815.41

3.

=RATE(36,(5711.38+60000)/36,-60000)

=0.5000% per month or 6% per year

jeff jeffy answered 5 months ago

John borrows $30,000 to buy a new car from a local bank with 0.55% interest rate...

John borrows $30,000 to buy a new car from a local bank with 0.55% interest rate per month (you don’t need to do any rate conversion). He agrees to pay off the loan in 36 equal end-of-month payments. The first payment will be made at the end of this month. a. What should be the monthly payment? Report the answer with 2 numbers after decimal place b. Create an amortization table showing his payment, interest payment, principal payment and loan...

You took a loan to buy a new car. The monthly interest rate on the loan...

You took a loan to buy a new car. The monthly interest rate on the loan is 1.5% and you have to pay $240 every month for 60 months 1)What is the Present value of the Cash flows if its an ordinary annuity? 2)What is the future value of cash flows if its an ordinary annuity? 3)What is the present value of the cash flows if its an annuity due? 4)What is the future value of cash flows if its...

You took out a loan to buy a new car. The monthly interest rate on the...

You took out a loan to buy a new car. The monthly interest rate on the loan is 1%. You have to pay $270 every month for 60 months. Attempt 1/5 for 8 pts. Part 1 What is the present value of the cash flows if it's an ordinary annuity? Attempt 1/5 for 8 pts. Part 2 What is the future value of the cash flows if it's an ordinary annuity? Attempt 1/5 for 10 pts. Part 3 What is...

Mark borrows $15,000 to buy a new car. His loan has an interest rate of 6.5%,...

Mark borrows $15,000 to buy a new car. His loan has an interest rate of 6.5%, compounded monthly, and his monthly payment is $293.49. If instead his loan had an interest rate of 8%, how much more would he have paid in interest by the time he finished repaying his loan in 60 months?

The three-month dollar interest rate in New York is 3.80% per annum. Alternatively, the three-month euro...

The three-month dollar interest rate in New York is 3.80% per annum. Alternatively, the three-month euro interest rate in Frankfort is 5.40% p.a. The current $/€ spot exchange rate is $1.1220/€. The euro three-month forward rate is quoted at $1.1210/€. Use the International Fisher Effect (IFE) to find what should be the expected three-month spot exchange rate of dollars against the euro (If not performing chain calculations, use interest rates up to four decimal places, and again use the proper...

The three-month dollar interest rate in New York is 3% per annum. Alternatively, the three-month euro...

The three-month dollar interest rate in New York is 3% per annum. Alternatively, the three-month euro interest rate in Frankfort is 5% p.a. The current $/€ spot exchange rate is $1.1340/€. The euro three-month forward rate is quoted at $1.1326/€. Show how a U.S. arbitrageur would exploit a possible covered interest arbitrage opportunity with a nominal $80,000,000. Don’t start with the formula. Explain in your own words the transactions the arbitrageur would execute and calculate the profit/loss the arbitrager would...

You buy a car with a down payment of $3000 and payments of $600 per month...

You buy a car with a down payment of $3000 and payments of $600 per month for 3 years. If the interest rate is 3.6% compounded monthly, what is the total cost of the car?

An online bank is offering to pay 0.25% interest per month on deposits. Your local bank...

An online bank is offering to pay 0.25% interest per month on deposits. Your local bank offers to pay 0.65% interest quarterly (every 3 months). Which is the higher interest rate?

You borrow $7083 to buy a car. This is a 38-month loan with an annual rate...

You borrow $7083 to buy a car. This is a 38-month loan with an annual rate of 4.04%. What is your required monthly payment? Round to the nearest $0.01 (e.g., if your answer is $385.4789, record it as 385.48). Do this on excel and explain how to do it please.

You buy a car for $40,000. You agree to a 72-month loan with a monthly interest...

You buy a car for $40,000. You agree to a 72-month loan with a monthly interest rate of 0.35 percent. a. What is your required monthly payment? b. What is the total amount interest payment over this period?

Question