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In: Finance
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 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 3.4%? a. Tim's monthly (end-of-month) payment amount is $ 1038.72. (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 3.4 %, would be $ nothing. (Round to the nearest cent.)
need help understanding the steps on how to solve it.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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,...
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...
Loan rates of interest Personal Finance Problem John Flemming has been shopping for a loan to...
Loan rates of interest Personal Finance Problem John Flemming
has been shopping for a loan to finance the purchase of a used car.
He has found three possibilities that seem attractive and wishes to
select the one with the lowest interest rate. The information
available with respect to each of the three $7,000 loans is shown
in the following table, Each loan requires John to make one
payment at the end of each year.
Loan Principal Annual payment Term (years)...
Calculate the monthly payments on a car loan of $25,000 financed at an APR of 6.5%...
Calculate the monthly payments on a car loan of $25,000 financed
at an APR of 6.5% for 36 months, rounded to nearest cent.
Mr Smith is struggling to repay his loan of K200,000 with payments of K4,279 made monthly...
Mr Smith is struggling to repay his loan of K200,000 with
payments of K4,279 made monthly in arrears for 5 years. (i) Find
the amount of the level annual repayment. (ii) Hence, otherwise,
calculate the APR of Mr Smiths loan, After exactly one year, a loan
company oers to `help' Mr Smith by restructuring his loan with new
monthly payments of K2,744.90 made in arrears. (iii) Assuming the
company charges the same APR as Mr Smiths original loan, calculate
the...
3. The bank states that a new car loan with monthly payments is available for three...
3. The bank states that a new car loan with monthly payments is
available for three years at an annual interest rate of 9%.
a) What would be the monthly payments on a $23,000 loan?
b) What is the effective annual interest rate (express to two
decimals)?
You have a car loan that requires monthly payments of $300 for the first year and...
You have a car loan that requires monthly payments of $300 for
the first year and $500 per month during the second year. The
annual rate on the loan is 12% and payments begin in one month.
What is the present value?
You have just bought a car. The $50,000 car loan from the finance company involves monthly...
You have just bought a car. The $50,000 car loan from the
finance company involves monthly payments made at the end of the
month, over 60 months. However, at the end of the loan, there is a
lump sum payment, called a balloon payment of $30,000.
Assume the interest rate applicable is 6% p.a. monthly rest
throughout the loan tenure.
(a) Discuss, using time value concepts of PV or FV of single
sums, or multiple sums, etc., how you can...
You have just bought a car. The $50,000 car loan from the finance company involves monthly...
You have just bought a car. The $50,000 car loan from the
finance company involves monthly payments made at the end of the
month, over 60 months. However, at the end of the loan, there is a
lump sum payment, called a balloon payment of $30,000.
Assume the interest rate applicable is 6% p.a. monthly rest
throughout the loan tenure.
(a) Discuss, using time value concepts of PV or FV of single
sums, or multiple sums, etc., how you can...
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