In: Finance

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 with a 5 year loan, and the annual percentage rate (APR) will be 3.9%.

**PLEASE SHOW IN EXCEL**

(A) Which option should you choose? Why?

(B) How much should the rebate be in order to make the two options equal?

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...

When you purchase a car, you may consider buying a brand-new car
or
a used one. A fundamental trade-off in this case is whether you
pay
repair bills (uncertain at the time you buy the car) or make loan
payments
that are certain.
Consider two cars, a new one that costs $15,000 and a used one
with
75,000 miles for $5,500. Let us assume that your current car’s
value and
your available cash amount to $5,500, so you could purchase...

Suppose you are thinking of buying a new car. One of the choices
you are considering is a hybrid car. This hybrid model car is
$9,000 more expensive than a traditional model; however, the hybrid
model will get 40 miles per gallon of gas as compared to 30 miles
per gallon for the traditional model. You expect the cost of gas to
hover around $3.60 in the foreseeable future.
Given the information above and your knowledge of CVP, answer
the...

Suppose you are thinking of buying a new car. One of the choices
you are considering is a hybrid car. This hybrid model car is
$9,000 more expensive than a traditional model; however, the hybrid
model will get 40 miles per gallon of gas as compared to 30 miles
per gallon for the traditional model. You expect the cost of gas to
hover around $3.60 in the foreseeable future.
Given the information above and your knowledge of CVP, answer
the...

1. You are considering buying a new car. Price is $23,000 and
you will pay down payment of $3000. If you plan to incase the car
over a 50 month period at a nominal interest of 12% what would be
you monthly payment?
A. $ 613.25
B. $ 510.25
C. $ 480. 65
D. $ 620.50
2. The conflict of interest exists between stockholders and
creditors in a corporation because stockholders may
A. Increase the firms investment risk level
B....

You are considering buying a new car. The sticker price is
$85,000 and you have $25,000 to put toward a down payment. If you
can negotiate a nominal annual interest rate of 6.5 percent and you
wish to pay for the car over a 5 year period, what are your monthly
car payments? DO NOT USE EXCEL

You are considering buying a new car, because you think it will
save you money. Your think your old car will cost $2,200 in gas
and maintenance next year (Year 1), and you expect that to
increase by 6% every year until the end of Year 10. A new car will
cost you $16,500 now (Year 0). You think it will cost $500 in
gas and maintenance next year (Year 1), and you expect that to
increase by 4% every...

You are considering the purchase of a new car using a financing
arrangement. Under the deal you must make a $10,000 deposit
immediately and then monthly payments of $800 for a period of 48
months. The monthly payments are made at the end of each month. The
interest rate is 12% p.a. compounded monthly. What is the effective
cost of the car?

Ziggy is considering purchasing a new car. The cash purchase
price for the car is $47913. What is the annual interest rate if
Ziggy is required to make annual payments of $12000 at the end of
the next five years? Use Factor Table.
8%.
11%.
6%.
10%.

Extra Credit Activity #1
You are considering buying a new car worth $15,000. You can
finance the car either by withdrawing cash from your savings
account (option 1), which earns 8% interest compounded monthly or
by borrowing $15,000 from your dealer for five years at 11%
interest compounded monthly and quarterly payments (option 2).
Show the loan amortization schedule for option 2 (50
points)
How much interest will you pay over the lifetime of the loan?
(15 points)
How much...

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