Question

In: Finance

You are purchasing a 2015 Chrysler 200 for $19,400, with 20% down. The balance will be...

You are purchasing a 2015 Chrysler 200 for $19,400, with 20% down. The balance will be financed at 7.6% over seven years with monthly payments. Find:

Monthly payment

Total interest charges

Interest in month three

How much interest is saved if you increase monthly payments by $50?

Five years later you sell for $5,000, and you must pay off the remaining loan balance when sold. What is your net cash position after selling?

Note: average auto depreciation is almost 50% in three years; Chrysler has poorest resale of all domestic manufacturers.

A few hints:

Be exact with your PMT. Don't round. Over many time periods, it results in significant imprecision.

For monthly interest, #1 -- find PMT, #2 -- find interest by multiplying principal x rate x time (1/12 of a year). #3 -- subtract interest from payment. #4 -- difference is principal reduction for the 1st month. #5 -- subtract #4 from original principal balance, then repeat step 2.

Use a finance calculator or Excel. No tables. Avoid modeling...imprecision and errors are common.

Solutions

Expert Solution


Related Solutions

You are purchasing a 2015 Chrysler 200 for $19,400, with 20% down. The balance will be...
You are purchasing a 2015 Chrysler 200 for $19,400, with 20% down. The balance will be financed at 7.6% over seven years with monthly payments. Monthy Payment= $238.82 Total Interest Charges= $ 4,540.60 Find: How much interest is saved if you increase monthly payments by $50? Five years later you sell for $5,000, and you must pay off the remaining loan balance when sold. What is your net cash position after selling? Note: average auto depreciation is almost 50% in...
24.You plan on purchasing a $650,000 home. You’ll put 20% down and borrow the balance from...
24.You plan on purchasing a $650,000 home. You’ll put 20% down and borrow the balance from Santander Bank. You borrow the money on a 30-year loan with an APR of 6.5%. (15 points 4/3/3/3/3) a.What is your monthly mortgage? b. Five years later, what is the balance on the loan? c.In the first five years, how much interest did you pay? 25.XYZ Company borrows $450,000 to purchase a piece of capital equipment. The term of the loan is 20 years...
Mr. Smith is purchasing a $ 120000 house. The down payment is 20 % of the...
Mr. Smith is purchasing a $ 120000 house. The down payment is 20 % of the price of the house. He is given the choice of two mortgages: a) a 20-year mortgage at a rate of 9 %. Find (i) the monthly payment: $   (ii) the total amount of interest paid: $   b) a 15-year mortgage at a rate of 9 %. Find (i) The monthly payment: $   (ii) the total amount of interest paid: $
Mr. Smith is purchasing a $ 160000 house. The down payment is 20 % of the...
Mr. Smith is purchasing a $ 160000 house. The down payment is 20 % of the price of the house. He is given the choice of two mortgages: a) a 20-year mortgage at a rate of 10 %. Find (i) the monthly payment: $ equation editor Equation Editor (ii) the total amount of interest paid: $ equation editor Equation Editor b) a 15-year mortgage at a rate of 10 %. Find (i) The monthly payment: $ equation editor Equation Editor...
Kari is purchasing a home for $220,000. The down payment is 25% and the balance will...
Kari is purchasing a home for $220,000. The down payment is 25% and the balance will be financed with a year mortgage at 8% and 4 discount points. Kari made a deposit of $30,000 (applied to the doen payment) when the sales contract was signed. Kari also has three expenses: credit report, $70; appraisal fee, $110; title insurance premium, 1% of amount financed; title search, $200; and attorney's fees, $500. Find the closing costs (in $).
Emily is considering purchasing a new home for $400,000. She intends to put 20% down and...
Emily is considering purchasing a new home for $400,000. She intends to put 20% down and finance $320,000, but is unsure which financing option to select. Emily is considering the following options: o Option 1: Fixed rate mortgage over 30 years at 6% interest, zero points, or o Option 2: Fixed rate mortgage over 30 years at 4% interest, plus two discount points. How long would her financial planner recommend that she live in the house to break even using...
Consider the following financial statement information: Account Beginning Balance Ending Balance Inventory $ 18,600 $ 19,400...
Consider the following financial statement information: Account Beginning Balance Ending Balance Inventory $ 18,600 $ 19,400 Accounts receivable 4,200 4,500 Accounts payable 5,800 5,200 Net sales 76,400 Cost of goods sold 51,700 Assume all sales and purchases are on credit.: How long is the cash cycle? (Use average balance sheet account balances.) Multiple Choice 80.21 days 116.09 days 101.03 days 113.58 days 73.57 days
You are offered a deal for purchasing a vehicle that requires you to pay $200 per...
You are offered a deal for purchasing a vehicle that requires you to pay $200 per month for the first year and payments of $400 per month during the second year. The APR is 18% and payments begin in one month. What is the present value of this 2-year loan?
You are considering purchasing a car with a sticker price of $36,270 (nonnegotiable with no down...
You are considering purchasing a car with a sticker price of $36,270 (nonnegotiable with no down payment required). You wish to make monthly payments for six years and the most you can afford to pay is $600 a month. Your local bank/credit union has agreed to loan you the money at a 4.39% annual interest rate. Create an amortization table reporting the beginning/ending loan balance, total payment, and portion of payment going to interest and principal. Create a IF statement...
You put 20% down on a home with a purchase price of $250,000. The down payment...
You put 20% down on a home with a purchase price of $250,000. The down payment is thus $50,000, leaving a balance owed of $200,000. A bank will loan you this remaining balance at 3.91% APR. You will make monthly end-of-the-period payments with a 30-year payment schedule. What is the monthly annuity payment under this schedule?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT