Question

Derek plans to buy a $25,614.00 car. The dealership offers zero percent financing for 53.00 months with the first payment due at signing (today). Derek would be willing to pay for the car in full today if the dealership offers him $____ cash back. He can borrow money from his bank at an interest rate of 5.26%.

**Answer Format: Currency: Round to: 2 decimal
places.**

Answer #1

The monthly payment for the Zero Percent Financing by the dealership = 25614/53 = 483.28

If we discount this payment (outflow) over a period of 53 months at the interest rate of the bank. we will get the amount Derek would be willing to pay now. hence the difference should be the cash back required.

The equation,

Present Value of Payments = 483.28 / (1+0.0043) + 483.28 /
(1+0.0043)^{2} + ..... + 483.28 /
(1+0.0043)^{53}

^{= 22811.96}

^{The Cash Back required will be = 25614 - 22811.95 =
2802.04.}

Derek plans to buy a $33,277.00 car. The dealership offers
zero percent financing for 56.00 months with the first payment due
at signing (today). Derek would be willing to pay for the car in
full today if the dealership offers him $____ cash back. He can
borrow money from his bank at an interest rate of 5.80%.
Submit
Answer format: Currency: Round to: 2 decimal places.

Derek plans to buy a $30,508.00 car. The dealership offers zero
percent financing for 52.00 months with the first payment due at
signing (today). Derek would be willing to pay for the car in full
today if the dealership offers him $____ cash back. He can borrow
money from his bank at an interest rate of 4.65%.

Derek plans to buy a $28,241 car. The dealership offers zero
percent financing for 49.00 months with the first payment due at
signing (today). Derek would be willing to pay for the car in full
today if the dealership offers him $____ cash back. He can borrow
money from his bank at an interest rate of 4.11%.

Derek plans to buy a $33,328.00 car. The dealership offers zero
percent financing for 58.00 months with the first payment due at
signing (today). Derek would be willing to pay for the car in full
today if the dealership offers him $____ cash back. He can borrow
money from his bank at an interest rate of 4.86%

Derek decides to buy a new car. The dealership offers him a
choice of paying $555.00 per month for 5 years (with the first
payment due next month) or paying some amount today. He can borrow
money from his bank to buy the car. The bank requires a 6.00%
interest rate. What is the most that he would be willing to pay
today rather than making the payments?
Derek plans to buy a $27,733.00 car. The dealership offers zero
percent...

Derek decides to buy a new car. The dealership offers him a
choice of paying $587.00 per month for 5 years (with the first
payment due next month) or paying some amount today. He can borrow
money from his bank to buy the car. The bank requires a 5.00%
interest rate. What is the most that he would be willing to pay
today rather than making the payments?
Answer Format: Currency: Round to: 2 decimal places.

Derek decides to buy a new car. The dealership offers him a
choice of paying $583.00 per month for 5 years (with the first
payment due next month) or paying some amount today. He can borrow
money from his bank to buy the car. The bank requires a 5.00%
interest rate. What is the most that he would be willing to pay
today rather than making the payments?

Derek decides to buy a new car. The dealership offers him a
choice of paying $585.00 per month for 5 years (with the first
payment due next month) or paying some amount today. He can borrow
money from his bank to buy the car. The bank requires a 5.00%
interest rate. What is the most that he would be willing to pay
today rather than making the payments? SHOW FINANCIAL CALCULATIONS
AND EQUATIONS, ROUND 2 DECIMALS

Derek decides to buy a new car. The dealership offers him a
choice of paying $532.00 per month for 5 years (with the first
payment due next month) or paying some $28,528.00 today. He can
borrow money from his bank to buy the car. What interest rate makes
him indifferent between the two options? ( round to 3 decimal
places as a percentage). (i.e 1.234%).

Derek decides to buy a new car. The dealership offers him a
choice of paying $519.00 per month for 5 years (with the first
payment due next month) or paying some $28,934.00 today. He can
borrow money from his bank to buy the car. What interest rate makes
him indifferent between the two options?
Answer format: Percentage Round to: 3
decimal places (Example: 9.243%, % sign required. Will accept
decimal format rounded to 5 decimal places (ex: 0.09243))
Derek wants...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 17 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 3 hours ago

asked 3 hours ago

asked 4 hours ago