Question

In: Finance

You are purchasing a car from your grandparents. You agree topay them $2000 today and...

You are purchasing a car from your grandparents. You agree to pay them $2000 today and $2000 per year for the next 3 years. If the Kelly Blue Book value of the car is $7,200, what is the implied interest rate you are paying your grandparents?

Solutions

Expert Solution

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Assume that you inherited $100,000 from your grandparents, today. You have exactly 20 years to retire...
Assume that you inherited $100,000 from your grandparents, today. You have exactly 20 years to retire and you decided to put the entire amount into 20 years, 4% annual interest annuity. A) Assuming you did not deposit any additional amount into this account, compute your account balance by the time you retire, using the annuity calculator. Then, compute the same using a scientific calculator (not a financial one) using the appropriate formulas from the textbook and show your calculations. (Make...
You plan to ask your grandparents for a down payment on a car that costs $30,000....
You plan to ask your grandparents for a down payment on a car that costs $30,000. The 4-year car loan you are going to get is: $300 monthly payments (1st payment one month from today) and 6% annual interest rate. How much down payment do you need from your grandparents? What is the present value of a 5-year annuity with annual payments of $200 at a 15% discount rate? You just got a 20-year mortgage loan with $1,200 monthly payments...
Sophia inherits inherited money from her grandparents. She inherits $100,000 from her grandparents, today. She has...
Sophia inherits inherited money from her grandparents. She inherits $100,000 from her grandparents, today. She has exactly 20 years to retire and she decided to put the entire amount into 20 years, 4% annual interest annuity. A) Assume that she did not deposit any additional amount into this account, compute your account balance by the time she retires. Please compute the problem using a scientific calculator (not a financial one) using the appropriate formulas and show your calculations step by...
5. You are purchasing a car today that costs $25,000. You have been given the following...
5. You are purchasing a car today that costs $25,000. You have been given the following financing options for the car. Option 1 is conventional 4-year financing at an interest rate of 4%, compounded monthly. This option requires monthly payments. Option 2 is a balloon loan which requires monthly payments of $375 for 2 years and then a final balloon payment for the remaining balance. The interest rate on this loan is 2.5%. a. What is the payment for the...
Describe your own grandparents and how you want to grandparent. 1. Describe your maternal grandparents. How...
Describe your own grandparents and how you want to grandparent. 1. Describe your maternal grandparents. How did ther grandparent? List the dimensions of meaning you think your grandparent assigned to their role ( centrality, valued elder, indulgence, re involvement, immorality) 2. Describe your paternal grandparents. How did they grandparent? List the dimensions of meaning you think your grandparent assigned to their role ( centrality, valued elder, indulgence, re involvement, immorality) 3. What type of grandparent will you be? Describe the...
Question You have wealth that was inherited from your own parents and grandparents. You want to...
Question You have wealth that was inherited from your own parents and grandparents. You want to help people with the wealth. At the same time, you also want to acquire profit as an income generation for you and your family’s daily survival and future saving. You do not agree with the concept of interest in the current conventional finance and you see Islamic ethics as a way of life. You intend to open your own company. Discuss how can you...
Question You have wealth that was inherited from your own parents and grandparents. You want to...
Question You have wealth that was inherited from your own parents and grandparents. You want to help people with the wealth. At the same time, you also want to acquire profit as an income generation for you and your family’s daily survival and future saving. You do not agree with the concept of interest in the current conventional finance and you see Islamic ethics as a way of life. You intend to open your own company. Discuss how can you...
Your coin collection contains 60 1958 silver dollars. If your grandparents purchased them for their face...
Your coin collection contains 60 1958 silver dollars. If your grandparents purchased them for their face value when they were new, how much will your collection be worth when you retire in 2043, assuming they appreciate at an annual rate of 8 percent?
You just celebrated your 25th birthday today. You plan to invest $2000 annually, with the first...
You just celebrated your 25th birthday today. You plan to invest $2000 annually, with the first $2000 invested on your 26th birthday and the last invested on your 60th birthday. What is the value of this investment on your 61st birthday if all invested funds earn 6 percent annually?
Suppose you are considering purchasing a new car. You and your spouse have narrowed it down...
Suppose you are considering purchasing a new car. You and your spouse have narrowed it down to two choices: a. Sedan Initial Price: $27,300 Annual O&M: $4,456 Expected trade-in value after 5 years: $9,100 b. SUV Initial Price: $38,795 Annual O&M: $3,050 Expected trade-in value after 5 years: $18,544 If you intend to keep your new vehicle for 5 years, then trade it in, determine the net present value (NPV) of each alternative, assuming a discount rate of 4.0%. Which...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT