1.Suppose you want to buy a car that costs $19,000. If the dealer is offering 100%...

1.Suppose you want to buy a car that costs $19,000. If the dealer is offering 100% financing at 6.2% APR for a 5 year loan, what would be the monthly payment? (Answer to the nearest penny)

2.Suppose you want to buy a house that costs $850,000. You are required to put 10% down, which means the amount to be borrowed is 90% of the price of the house. If you want a 30 year mortgage, and the borrowing rate is 5.3% APR, what would be your monthly payment? (Answer to the nearest penny)

Solutions

Expert Solution

a.Information provided:

Price of the car= mortgage= $19,000

Time= 5 years*12= 60 months

Interest rate= 6.2%/12= 0.5167

The monthly payment is calculated by entering the below in a financial calculator:

PV= -19,000

N= 60

I/Y= 0.5167

The value obtained is 369.09.

Therefore, the monthly payment is $369.09.

b.Information provided:

Price of the house= $850,000

Down payment= 0.10*$850,000= $85,000

Mortgage= $850,000 - $85,000= 765,000

Time= 30 years*12= 360 months

Interest rate= 5.3%/12= 0.4417%

The monthly payment is calculated by entering the below in a financial calculator:

PV= -765,000

N= 360

I/Y= 0.4417

The value obtained is 4,248.09.

Therefore, the monthly payment is $4,248.09.

In case of any query, kindly comment on the solution.

jeff jeffy answered 6 months ago

Next > < Previous

Related Solutions

1) You want to buy a $24,000 car. The company is offering a 3% interest rate...

1) You want to buy a $24,000 car. The company is offering a 3% interest rate for 48 months (4 years). What will your monthly payments be? 2) Suppose you want to have $800,000 for retirement in 20 years. Your account earns 4% interest. How much would you need to deposit in the account each month?

You want to buy a $18,500 car. The company is offering a 3% interest rate for...

You want to buy a $18,500 car. The company is offering a 3% interest rate for gour years. a. what will your minthly apyment be? Round to the nearest cent. b. assuming you pay that monthly amount for the entire 4 years, what is the total amount of money you will pay during thise 4 years for the car. C. How much interest will you pay during thise 4 years.

You would like to buy a new car that costs $25,000. The dealer offers you a...

You would like to buy a new car that costs $25,000. The dealer offers you a 3-year loan at an 8% interest rate, and because that rate is higher than market rates they offer to lower the price by $2,000. Assuming you make the required payment, should you accept his offer or seek alternative financing at the 3% rate?

1. You decide to buy a new car. You negotiate with the dealer and get the...

1. You decide to buy a new car. You negotiate with the dealer and get the car for $40,000. What will be your monthly payment if you finance the purchase through your bank with a 6-year, 11% auto loan (assume no down payment). a. What if you made a down payment of $4,000? What would be the monthly payment for the car?

You are negotiating to buy a new car with a car salesman at a local dealer....

You are negotiating to buy a new car with a car salesman at a local dealer. You have negotiated the price to $35,000. You have $5,000 to put towards the down payment and plan to get a loan for the rest. If you can get an annual interest rate of 11 percent APR (with monthly compounding) over a 5-year period, what would be your monthly payment? Round it to two decimal place (cents), e.g., 234.56.

Suppose that you decided to buy a new house. The house you want to buy costs...

Suppose that you decided to buy a new house. The house you want to buy costs $520,000 and the interest rate is 7%. You currently have $130,000 and are required to put a 20% down payment plus an additional 3% of the loan amount as closing costs. 1) When will you have enough money for the down payment and closing costs, assuming that the $80,000 is the only investment that you make? 2) Suppose that you plan to buy the...

1/ Assume you purchased a car that costs $14,000. The car dealership is offering financing at...

1/ Assume you purchased a car that costs $14,000. The car dealership is offering financing at 5% per year. How much is your annual payment assuming you financed the car for 5 years? How much did the car actually cost? 2/ At the beginning of the season on April 1, Green Acres Golf Course completed a physical inventory count and found that $3,000 of inventory was still on hand. Throughout the month of April, Green Acres had the following purchase...

Suppose you want to buy a condominium that costs $320,000. You will make a down payment...

Suppose you want to buy a condominium that costs $320,000. You will make a down payment equal to 20 percent of the price of the condominium and finance the remainder with a loan that has an interest rate of 4.65 percent compounded monthly. If the loan is for 30 years, what are your monthly mortgage payments? Multiple Choice $1,350.89 $1,286.48 $1,320.03 $1,468.12 $1,534.46

It is time to buy a new car. You worked hard and want to buy an...

It is time to buy a new car. You worked hard and want to buy an expensive car (Porsche Cayenne) for $100,000. Porsche dealership will gladly finance your new purchase. However, the only way for you to be financed is to show them that you have 20% of the money needed. As soon as you have that much money in your account, the dealership will finance your new vehicle. You start saving for 52 months with the APR of 7.5%,...

Suppose you want to buy a new car and trying to choose between two models: Model...

Suppose you want to buy a new car and trying to choose between two models: Model A: costs $17,000 and its gas mileage is 20 miles per gallon and its insurance is $200 per year. Model B: costs $25,000 and its gas mileage is 35 miles per gallon and its insurance is $400 per year. If you drive approximately 40,000 miles per year and the gas costs $3 per gallon: Find a formula for the total cost of owning Model...

Subjects