Question

2. Suppose a client is in the market for a car. The client can afford to spend $500 per month, but she decides it is best to buy a cheap car now and use what is left of the $500 to save for a really nice one later. These savings will earn an effective annual rate of 9% interest. Suppose she decides to borrow $15,000 to buy a used car. The loan is for 48 months at a 7.8% APR. Three years later she sells this car for $4,500. How much money will the client have for her new car after paying off the old one assuming that all payments and compounding occurred on a monthly basis? (Do not consider sales or income taxes in the calculations.) Please show all calc's.

Answer #1

Jill wants to buy a car but needs to calculate how much she can
afford to borrow. The maximum she can repay is $1600 at the end of
each quarter and the bank has indicated it will charge a fixed 7.1%
p.a compounding quarterly. If she takes a loan for 4 years how much
can she afford to borrow? (Do not use the $ sign or commas; include
cents e.g 24500.09)

Q1: Jill wants to buy a car but needs to calculate how much she
can afford to borrow. The maximum she can repay each month-end is
$560 per month and the bank has indicated it will charge a fixed
8.0% p.a compounding monthly. If she takes a loan for 5 years how
much can she afford to borrow? (Do not use the $ sign or commas;
include cents e.g 24500.09)
Q2: Payments of $200 per month are deposited into a...

You would like to save annually for buying a car 6 years from
today. Suppose the first deposit is made today and the last deposit
will be made 5 years from now. Assume the car will cost you $30,000
and your deposits earn you interest at 6% p.a, compounded
annually.
(a) What is your annual deposit amount?
(b) Instead of making annual deposits, you would like to make
your deposit monthly and the bank is happy to pay your interest...

Option #1: Time Value of Money Personal Finance Application
Your friend Sue has asked you to help her out as she is
developing her financial plan. Help her come up with a plan for her
finances and how she can set herself up for financial success!
She has an after tax income of $48,000 and budgets $30,000 for
necessary expenses. This leaves $18,000 to spend on debt and
savings annually. (Assume all annuity payments are in the form of
ordinary...

****FOR THIS HOMEWORK ASSIGNMENT, YOU MUST SHOW ALL WORK
(CALCUATIONS) AND DRAW TIME LINES.
1) Jane is 25 years old and was able to save
$25,000. After doing some research, she
identifies a stock called HPG Industries that has a dividend yield
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information, she decides to invest in this stock. Considering that
HPG Industries pays the dividend consistently, how many years will
it take for Jane...

Peter wants to save $500,000 to buy a sport car. He plans to
make a deposit of $8,000 each month to achieve this goal. ABC Bank
offers a deposit rate of 0.5% per month while DEF Bank offers a
deposit rate of 6% with quarterly compounding.
a) Which bank should Peter choose? Briefly explain your answer
with appropriate calculations [within 20 words].
b) After making the deposit into the chosen bank as mentioned in
part (a), how long does Peter...

Geoffrey is the owner of a small grocery store, and is
considering buying a car to help him transport his wares. He has
found a suitable used car online that he was able to negotiate to a
price of $40,000. After doing a bit more research, he has found the
following additional expenses involved in the purchase:
Insurance and registration will cost $510 per year, payable at
the start of each year
Based on mileage estimates, petrol will cost $220...

1. Summarize in a few sentences what Ayers found about pricing
strategies in car markets.
2. Do you think that this is a profit maximizing strategy? Do
you think this is an appropriate and reasonable strategy for
businesses to undertake it it increases their profits?
3. Can you think of other goods or services that could be - or
are - priced the same way? Check out the article on discrimination
in coffee shops "Waiting for Good Joe" for some...

QUESTION 1
All of the followings are the rights and privileges of a
Common Stockholders EXCEPTING:
a.
Voting/Proxy Rights
b.
Right to Dividends
c.
Residual Right
d.
Pre-emptive Right
e.
Right to Interest Payments
10 points
QUESTION 2
Your best friend's parents want to buy a home in the
Worcester County, but they don’t know the exact amount of money
that they can afford to borrow. They can afford monthly payments of
$ 1,800. A friendly bank in Worcester...

2. What is the duration of a $1,000, 8% coupon bond with 4 years
to maturity. Assume that all the market interest rates are 10%.
*
A. 4 years
B. 3.56 years
C. 3 years
D. 3.75 years
3. If you expect the inflation rate to be 17 percent next year
and a one-year bond has a yield to maturity of 8 percent, then the
real interest rate on this bond is:
A. 10%
B. 25%
C. 9%
D. 8%...

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