Question

PV AND LOAN ELIGIBILITY You have saved $5,000 for a down payment on a new car....

PV AND LOAN ELIGIBILITY

You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $400. The loan will have a 8% APR based on end-of-month payments.

What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent.

What is the most expensive car you can afford if you finance it for 60 months? Do not round intermediate calculations. Round your answer to the nearest cent.

Homework Answers

Answer #1

PV of annuity is mathematically represented as:

P = $400, r = 8%/12 = 0.67% (monthly)

a) Financing for 48 months

n = 48

PV = 400 * 40.9619

PV = $16,384.77

This is the loan that can be afforded.

Hence maximum value of car that you can purchase = $5,000 + $16,384.77 = $21,384.8

b) Financing for 60 months

n = 60

PV = 400 * 49.3184

PV = $19,727.37

This is the loan that can be afforded.

Hence maximum value of car that you can purchase = $5,000 + $19,727.37 = $24,727.4

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
10. PV AND LOAN ELIGIBILITY You have saved $5,000 for a down payment on a new...
10. PV AND LOAN ELIGIBILITY You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $500. The loan will have a 9% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. $   What is the most expensive car you can afford if you finance it for...
PV AND LOAN ELIGIBILITY You have saved $4,000 for a down payment on a new car....
PV AND LOAN ELIGIBILITY You have saved $4,000 for a down payment on a new car. The largest monthly payment you can afford is $350. The loan will have a 8% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. $   What is the most expensive car you can afford if you finance it for 60...
Problem 5.26 PV AND LOAN ELIGIBILITY You have saved $3,000 for a down payment on a...
Problem 5.26 PV AND LOAN ELIGIBILITY You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $400. The loan will have a 8% APR based on end-of-month payments. a. What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. b. What is the most expensive car you can afford if you finance...
You have saved $5,000 for a down payment on a new car. The largest monthly payment...
You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $450. The loan will have a 9% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. $   What is the most expensive car you can afford if you finance it for 60 months? Do not round...
You have saved $5,000 for a down payment on a new car. The largest monthly payment...
You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $400. The loan will have a 15% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 months? Do not round intermediate calculations. Round your answers to the nearest cent.
You have saved $3,000 for a down payment on a new car. The largest monthly payment...
You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $350. The loan will have an 8% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. What is the most expensive car you can afford if you finance it for 60 months? Do not round intermediate...
You have saved $3,000 for a down payment on a new car. The largest monthly payment...
You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $300. The loan will have a 10% APR based on end-of-month payments. A.What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. B. What is the most expensive car you can afford if you finance it for 60 months? Do not round...
You have saved $5,000 for a down payment on a new car. The largest monthly payment...
You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $350. The loan will have a 9% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 months? Do not round intermediate calculations. Round your answers to the nearest cent. Financed for 48 months: $ ___ Financed for 60 months: $ ___
You have saved $5,000 for a down payment on a new car. The largest monthly payment...
You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $500. The loan will have a 15% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 months? Do not round intermediate calculations. Round your answers to the nearest cent. Financed for 48 months: $ Financed for 60 months: $
You have saved $3,000 for a down payment on a new car. The largest monthly payment...
You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $300. The loan will have a 9% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 months? Do not round intermediate calculations. Round your answers to the nearest cent. Financed for 48 months: $   Financed for 60 months: $  
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT