Question

Present

value.

  A​ smooth-talking used-car salesman who smiles considerably is offering you a great deal on a​ "pre-owned" car. He​ says, "For only

4

annual payments of

​$2,700​,

this beautiful 1998 Honda Civic can be​ yours." If you can borrow money at

8​%,

what is the price of this​ car? Assume the payment is made at the end of each year.

If you can borrow money at

8​%,

what is the price of this​ car?

​(Round to the nearest​ cent.)

2)

Number of

payments.

Tony is offering two repayment plans to Phil for a long overdue loan. Offer 1 is to receive a visit from an enforcer and the debt is due in full at once. Offer 2 is to pay back

​$4,000

at the end of the year at an interest rate of

21​%

until Phil pays off the loan principal. Phil owes Tony

​$11,000.

How long will it take for Phil to pay off the loan if he takes offer​ 2?

How long will it take for Phil to pay off the loan if he takes offer​ 2?

3)

Payments.

  Sam​ Hinds, a local​ dentist, is going to remodel the dental reception area and add two new workstations. He has contacted​ A-Dec, and the new equipment and cabinetry will cost

​$24,000.

​ A-Dec will finance the equipment purchase at

7.5%

for

8

years. What will Hinds have to pay in annual payments for this​ equipment?

What will Hinds have to pay in annual payments for this​ equipment?

Answer 1

Answer:

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