Question

A car dealership offers you no money down on a new car. You may pay for the car for 5 years by equal monthly end-of-the-month payments of $621 each, with the first payment to be made one month from today. If the discount annual rate is 3.82 percent compounded monthly, what is the present value of the car payments?

Answer #1

- Periodic Monthly payment at the end of each month for 5 years is $621

Calculating the Present value of these Annuity payments:-

Where, C= Periodic Payments = $621

r = Periodic Interest rate = 3.82%/12 = 0.318333%

n= no of periods = 5 years*12 = 60

Present Value = $33,868.90

So, **the present value of the car payments is
$33,868.90**

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comments. *

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a
car dealership offers you no money down on a. new car you may pay
for the car for 5years by equal monthly end of the month payments
of $574 each with the first paymwnt to be made one month from today
.if thr discoubt annul rate is 17.42 percent compounded monthly
what is the present value of the car payments?round the answer to
two decimal places

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