Question

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.

Answer #1

Solution

Most expensive car that can be afforded =Loan amount+Downpayment=

Loan amount =Present value of annuity=Annuity payment*((1-(1/(1+i)^m))/i)

where

i-discount or intrest rate per period-15/12=1.25% per month

m-number of periods

Present value of annuity =?

Annuity payment =400

**Finance for 48 months**

m=48

Putting values in formula

Loan amount=Present value of monthly payments(Annuity)=400*((1-(1/(1+.0125)^48))/.0125)=14372.59236

**Thus the maximum value for which he can afford the
ca**r=14372.59236+5000**=$19372.59 (Rounded to nearest
cent)**

**Finance for 60 months**

Loan amount=Present value of monthly payments(Annuity)=400*((1-(1/(1+.0125)^60))/.0125)=16813.8367

**Thus the maximum value for which he can afford the
ca**r=16813.8367+5000**=$21813.84 (Rounded to nearest
cent)**

**If you are satisfied with the answer,please give a
thumbs up**

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You have saved $5,000 for a down payment on a new car. The
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Do not round intermediate calculations. Round your answers to the
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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
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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?...

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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 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 $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
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Do not round intermediate calculations. Round your answers to the
nearest cent.
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10.
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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
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a 8% APR based on end-of-month payments.
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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
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largest monthly payment you can afford is $400. The loan will have
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it for 48 months? Do not round intermediate calculations. Round
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