Question

In: Finance

(32) You plan to buy a car that has a total "drive-out" cost of $21,100. You...

(32) You plan to buy a car that has a total "drive-out" cost of $21,100. You will make a down payment of $2,321. The remainder of the car's cost will be financed over a period of 4 years. You will repay the loan by making equal monthly payments. Your quoted annual interest rate is 12% with monthly compounding of interest. (The first payment will be due one month after the purchase date.) What will your monthly payment be?

$581.69
$489.63
$515.22
$494.52
$460.75

Solutions

Expert Solution

Monthly payment [P×r×(1+r)^n]÷[(1+r)^n-1]
Here,
1 Interest rate per annum 12.00%
2 Number of years                                                                                             4
3 Number of compoundings per per annum                                                                                          12
1÷3 Interest rate per period ( r) 1.00%
2×3 Number of periods (n) 48
Loan amount (P) $                                                                              18,779 =21100-2321
Monthly payment $                        494.52
(18779×1%×(1+1%)^48)÷((1+1%)^48-1)

Related Solutions

You decide to buy a new car, with a drive-out price of $37,500. You finance the...
You decide to buy a new car, with a drive-out price of $37,500. You finance the car at 4.8% APR for 5 years, with end of month payments. Answer the following questions. Show your inputs for potential partial credit. Show your answer to the nearest $.01 a. What is your monthly payment? b. How much of your 25th payment is payment of principal? c. Over the entire life of the loan (assuming you pay on time), what was the total...
You plan to buy a car in one year. It will cost $15,000 at that time....
You plan to buy a car in one year. It will cost $15,000 at that time. You now have $5,000 in a bank that pays 12% compounded monthly. You will save for the car by making monthly deposits in the bank for the next 12 months. How much will you have to deposit each month to have enough money in total to make the purchase? Select one: a. $738.50 b. $835.18 c. $769.43 d. $682.80 Karl has $100,000 in student...
You are planning to buy a new car. The cost of the car is $50,000. You...
You are planning to buy a new car. The cost of the car is $50,000. You have been offered two payment plans: • A 10 percent discount on the sales price of the car, followed by 60 monthly payments financed at 9 percent per year. • No discount on the sales price of the car, followed by 60 monthly payments financed at 2 percent per year. If you believe your annual cost of capital is 9 percent, which payment plan...
You plan to buy a new car. The price is $30,000 and you will make a...
You plan to buy a new car. The price is $30,000 and you will make a down payment of $4,000. Your annual interest rate is 10% and you intend to pay for the car over five years. What will be your monthly payment?
You borrow $29,000 to buy a car. You plan to payoff the car within 6 years...
You borrow $29,000 to buy a car. You plan to payoff the car within 6 years and the APR on the car loan is 2.99%. Using an excel to create an amortization for this car payment for 72 months. Please print out your excel and turn it in for 6 points extra credit on the test. You need to turn in your own work. Can you post 24-61 please? Month Beginning Balance Monthly Payment Interest Paid Principal Paid Ending Balance...
You plan on purchasing a new car in 9 months. The cost of the car in...
You plan on purchasing a new car in 9 months. The cost of the car in 9 months will be $25,127. How much would you have to invest today to exactly pay for the new car if you investments earn 4.86% APR (compounded monthly)?
You want to buy a fancy car. For this goal, you plan to save $8,000 per...
You want to buy a fancy car. For this goal, you plan to save $8,000 per year, beginning immediately. You will make 5 deposits in an account that pays 8% interest. Under these assumptions, how much will you have 5 years from today? a.   $51,402 b.   $46,718 c.    $47,635 d.   $50,687
You are graduating from college and decide to buy a new car today. You plan to...
You are graduating from college and decide to buy a new car today. You plan to buy a car worth $60,000 and decide to finance your purchase. Currently, the dealership is offering a flexible financing plan in which you only need to make a payment of $7,000 at the end of every year for the next 10 years. The remaining balance will be due as a one-time payment (balloon payment) at the end of the 10th year. Given the recent...
You plan to buy a house in 24 months. The cost of the house at that...
You plan to buy a house in 24 months. The cost of the house at that time will be $300,000 . How much do you have to invest each month, starting next month, for 12 months to exactly pay for the house if you r investments earn 4.50% APR (compounded monthly)?
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...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT