Question

The price of a car you are interested in buying is $93.45k. You negotiate a 6-year...

The price of a car you are interested in buying is $93.45k. You negotiate a 6-year loan, with no money down and no monthly payments during the first year. After the first year, you will pay $1.23k per month for the following 5 years, with a balloon payment at the end to cover the remaining principal on the loan. The annual percentage rate (APR) on the loan with monthly compounding is 5%. What will be the amount of the balloon payment 6 years from now?

Note: The term “k” is used to represent thousands (× $1,000).

Required: Suppose the loan has initially been paid in full (without a balance due at maturity), the amount would have totaled $37k. Calculate the absolute percentage difference between the fully amortized loan and the balloon payment.

Answer% Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The price of a car you are interested in buying is $93.45k. You negotiate a 6-year...
The price of a car you are interested in buying is $93.45k. You negotiate a 6-year loan, with no money down and no monthly payments during the first year. After the first year, you will pay $1.23k per month for the following 5 years, with a balloon payment at the end to cover the remaining principal on the loan. The annual percentage rate (APR) on the loan with monthly compounding is 5%. What will be the amount of the balloon...
The price of a car you are interested in buying is $93.82k. You negotiate a 6-year...
The price of a car you are interested in buying is $93.82k. You negotiate a 6-year loan, with no money down and no monthly payments during the first year. After the first year, you will pay $1.3k per month for the following 5 years, with a balloon payment at the end to cover the remaining principal on the loan. The annual percentage rate (APR) on the loan with monthly compounding is 5%. What will be the amount of the balloon...
You are looking to purchase a Tesla Model X sport utility vehicle. The price of the...
You are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle is $93,750. You negotiate a six-year loan, with no money down and no monthly payments during the first year. After the first year, you will pay $1,325 per month for the following five years, with a balloon payment at the end to cover the remaining principal on the loan. The APR on the loan with monthly compounding is 3.0 percent. What will be...
You have taken a 5 year car loan of $30,000 at 3% APR with monthly compounding....
You have taken a 5 year car loan of $30,000 at 3% APR with monthly compounding. What is the amount of principal & interest payment in your first month payment? A. Principal: $464.06; Interest: $75 B. Principal: $539.06; Interest $1.35 C. Principal: $539.60; Interest: $0 D. Principal: $500.00; Interest: $39.06 E. Principal: $470.89; Interest: $75
You would like to purchase a car whose price is 171,000 SEK. You are offered a...
You would like to purchase a car whose price is 171,000 SEK. You are offered a loan to cover the entire amount and its terms establish an APR with monthly compounding equal to 3%. The loan is supposed to be paid back in 9 years with equal monthly payments. What is the monthly payment? (Round your answer to the nearest integer). a) None of the other alternatives are correct b) 22005 c) 1809 d) 5414 e) 1583 f) 19238
You would like to save annually for buying a car 6 years from today. Suppose the...
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...
You are considering buying a new car for $37,000. If you purchase the car you will...
You are considering buying a new car for $37,000. If you purchase the car you will pay $7,000 of the purchase price as a down payment. Below are the two options to choose from. Option 1: Pay off the amount borrowed to purchase the car with a 5 year loan, and the annual percentage rate (APR) will be 0%. Option 2: Receive a $2,000 instant rebate. This will lower your loan amount. Pay off the amount borrowed to purchase the...
Suppose that you take out a mortgage loan with the following characteristics: compounding period is monthly...
Suppose that you take out a mortgage loan with the following characteristics: compounding period is monthly loan is for $350,000 APR = 5% life of loan for the purpose of calculating the mortgage payments is 30 years the loan requires a balloon payment of the balance of the principal owed at the end of year 5, i.e., the balance owed immediately after the 60th payment. What is the size of the balloon payment? Do not round at intermediate steps in...
You take out a $325,000 thirty-year mortgage amortized loan. The interest rate is 6% with monthly...
You take out a $325,000 thirty-year mortgage amortized loan. The interest rate is 6% with monthly payments of $1948.54. What is the principal portion of your first payment?
You have just taken out a $28,000 car loan with a 6 %​APR, compounded monthly. The...
You have just taken out a $28,000 car loan with a 6 %​APR, compounded monthly. The loan is for five years. When you make your first payment in one​ month, how much of the payment will go toward the principal of the loan and how much will go toward​ interest?  ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.) When you make your first​ payment,​$__ will go toward the principal of the loan and $__will...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT