Question

You want to buy a new car. You can afford payments of $300 per month and...

You want to buy a new car. You can afford payments of $300 per month and can borrow the money at an annual interest rate of 5.5% compounded monthly for 5 years. How much are you able to borrow? $ How much interest do you pay? $

Homework Answers

Answer #1
ans a) How much are you able to borrow
We have to use financial calculator to solve this
put in calcualtor
FV 0
PMT -300
I 5.5%/12 0.4583%
N 5*12 60
Compute PV $15,705.85
Ability to borrow = $15,705.85
ans b) Amount of interest paid
we have to compute the future value
put in calculator
PV $0.00
PMT -300
I 0.4583%
N                 60
Compute FV $20,664.25
Interest = $4,958.40
22664.25-15705.58
answer = $4,958.40
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
You want to buy a new car. You can afford payments of $500 per month and...
You want to buy a new car. You can afford payments of $500 per month and can borrow the money at an annual interest rate of 5.1% compounded monthly for 5 years. How much are you able to borrow? $ How much interest do you pay? $
You want to buy a new car. You can afford payments of $450 per month and...
You want to buy a new car. You can afford payments of $450 per month and can borrow the money at an interest rate of 6.8% compounded monthly for 3 years.
You really want to buy a used car for $11,000, but can only afford $200 a...
You really want to buy a used car for $11,000, but can only afford $200 a month. What annual interest rate (compounded monthly) would you need to find to be able to afford the car, assuming the loan is for 60 months? Estimate the rate to the nearest percent.
You are borrowing money to buy a car. If you can make payments of $330 per...
You are borrowing money to buy a car. If you can make payments of $330 per month starting one month from now at an annual interest rate of 12%, how much will you be able to borrow for the car today if you finance the amount over 5 years?
You are borrowing money to buy a car. If you can make payments of $508 per...
You are borrowing money to buy a car. If you can make payments of $508 per month starting one month from now at an annual interest rate of 9%, how much will you be able to borrow for the car today if you finance the amount over 4 years?
Marie can afford a $250 per month car payment. She's found a 5 year loan with...
Marie can afford a $250 per month car payment. She's found a 5 year loan with an annual rate of 7% compounded monthly. How expensive of a car can she afford? How much total money will she pay the loan company? How much of that money is interest?
Phil can afford $150 a month for 6 years for a car loan. If the interest...
Phil can afford $150 a month for 6 years for a car loan. If the interest rate is 5.5 percent compounded monthly, how much can he afford to borrow to purchase a car? rev: 10_26_2013_QC_37910 $9,364.74 $9,181.11 $10,800.00 $9,504.00 $7,770.23
You want to buy a new car, but you can make an initial payment of only...
You want to buy a new car, but you can make an initial payment of only $1729 and can afford monthly payments of at most $517. If the interest rate is 9.4 percent per year compounded monthly and you finance the purchase over 48 months, what is the maximum price you can pay for the car? 25938.83 18787.33 25587.3 19526.21 22346.81
Todd can afford to pay $325 per month for the next 6 years in order to...
Todd can afford to pay $325 per month for the next 6 years in order to purchase a new car. The interest rate is 5.5 percent compounded monthly. What is the most he can afford to pay for a new car today?
4. You want to buy a new car in 3 years which will cost $42,000. You...
4. You want to buy a new car in 3 years which will cost $42,000. You plan to get a 5-year car loan at a 6% interest rate but don’t want your monthly payments to be over $300. You plan to save the rest needed by making monthly deposits into the bank, earning 7.5% on your money. How much do you need to save monthly over the next 3 years to reach your goal? 6. You are buying a new...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT