You lease a car with a $600 down payment (due at the start of the lease),...

You lease a car with a $600 down payment (due at the start of the lease), 48 monthly payments of $553 (first payment due one month from today), and a $12,000 residual value. You plan to keep the car for 6 years total and sell it for an estimated $7,000. If your cost of capital is an APR of 4.8% (compounded monthly), what is the net cost of the lease including the effects of down payment, lease payments, residual value, and estimated $7,000 resale price? Round and express your answer to the nearest whole dollar (i.e., nearest integer).

Expert Solution

jeff jeffy answered 1 year ago

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?

You have saved $3,000 for a down payment on a new car. The largest monthly payment...

You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $500. The loan will have a 11% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the most expensive car you can afford if you finance it for 60 months? Do not round...

You have saved $4,000 for a down payment on a new car. The largest monthly payment...

You have saved $4,000 for a down payment on a new car. The largest monthly payment you can afford is $450. The loan will have a 9% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the most expensive car you can afford if you finance it for 60 months? Do not round...

You have saved $5,000 for a down payment on a new car. The largest monthly payment...

You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $450. The loan will have a 6% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 months? Do not round intermediate calculations. Round your answers to the nearest cent. Financed for 48 months: $ Financed for 60 months: $ Find the present values of the following...

saved $3000 for a down payment on a car. the largest monthly payment you can afford...

saved $3000 for a down payment on a car. the largest monthly payment you can afford is $400. The loan will be at 8%APR based on end of month payments. a) What is the most expensive car you can afford if you finance for 48 months? b) What is the most expensive car financing 60 months?

You want a bank loan in order to buy a car (with no down payment of...

You want a bank loan in order to buy a car (with no down payment of your own). You already own a house on which you pay $1,600 per month in mortgage payments, $300 per month in property taxes and $100 per month in utilities. Your gross family income is $80,000 per year. You have no other debts. The bank is willing to give you a loan which will be amortized over 5 years (i.e., 60 monthly payments). The interest...

In order to buy a new car, you finance $23,000 with no down payment for a...

In order to buy a new car, you finance $23,000 with no down payment for a term of five years at an APR of 6%. After you have the car for one year, you are in an accident. No one is injured, but the car is totaled. The insurance company says that before the accident, the value of the car had decreased by 25% over the time you owned it, and the company pays you that depreciated amount after subtracting...

You want to buy a car valued at $48,000. You will make an upfront down-payment of...

You want to buy a car valued at $48,000. You will make an upfront down-payment of $5,000 on the car, and borrow the rest of the money from your bank. Your bank will give you a 5-year loan at 2.5% APR compounded semi-annually. You plan to make biweekly payments (i.e., one payment every two weeks) on the loan. The bank requires that you make the first payment two weeks after you signed the loan contract. Find the answer to the...

Facts and Assumptions: Lease Term in Months 24 Lease Down Payment $ 500.00 Monthly Lease Payments...

Facts and Assumptions: Lease Term in Months 24 Lease Down Payment $ 500.00 Monthly Lease Payments $ 300.00 Sales Tax Rate 8% Lease Buyout at End $ 15,000.00 Title Fee $ 25.00 Car Loan Market Rate 7% Outright Purchase Price Before Tax and Title $ 19,500.00 What is the NPV of the lease? What would it cost you to buy the car today if you were paying cash? Round you answer to the nearest whole number. Do not use $,...

You have saved $10,000 for a down payment on the purchase of a new car, however,...

You have saved $10,000 for a down payment on the purchase of a new car, however, since you plan to buy the car one year from today, you need to decide how to invest the money for one year. You are limited to one of two choices: 1. A Bond Fund with an expected return of 3%/year 2. A Stock Fund with an expected return of 7%/year. Which fund is best? Explain why!

Question