Question

Lupé made a down payment of $8000 toward the purchase of a new car. To pay the balance of the purchase price, she has secured a loan from her bank at the rate of 5%/year compounded monthly. Under the terms of her finance agreement she is required to make payments of $440/month for 36 months.

What is the cash price of the car? (Round your answer to the nearest cent.)

Answer #1

Mortgage amount | = | Presnt value of annuity of monthly payment | |||||

Present Value of annuity | = | P*PVAF(rate,time) | |||||

where P | = | monthly payment=$440 | |||||

t | = | time in months=36 months | |||||

r | = | interest rate = r= 0.05/12=0.004167 | |||||

calculation of PVAF(0.4167%,36) | |||||||

PVAF(rate,time) | = | [1-(1+r)^-n]/r | |||||

PVAF(0.4167%,36) | = | [1-(1+0.004167)^-36]/0.004167 | |||||

= | [1-(1.004167)^-36]/0.004167 | ||||||

= | [1-0.0.860966]/0.004167 | ||||||

= | 0.139034/0.004167 | ||||||

= | 33.3655 | ||||||

Present Value of annuity | = | $440*33.3655 | |||||

= | $ 14,680.82 | ||||||

cash price of car | = | $8,000+$14,680.82 | |||||

= | $ 22,680.82 | ||||||

If you have any doubt,please ask | |||||||

Please upvote the answer |

Joe secured a loan of $13,000 four years ago from a bank for use
toward his college expenses. The bank charges interest at the rate
of 5%/year compounded monthly on his loan. Now that he has
graduated from college, Joe wishes to repay the loan by amortizing
it through monthly payments over 15 years at the same interest
rate. Find the size of the monthly payments he will be required to
make. (Round your answer to the nearest cent.)
$...

The price of a new car is $12,000. Assume that an individual
makes a down payment of 25% toward the purchase of the car and
secures financing for the balance at the rate of 5%/year compounded
monthly. (Round your answers to the nearest cent.)
(a) What monthly payment will she be required to make if the car
is financed over a period of 48 months? Over a period of 60
months?
48 months
$
60 months
$
(b) What will...

Kim bought a new car for $28,000. She paid a 20% down payment
and financed the remaining balance for 36 months with an APR of
4.8%. Assuming she made monthly payments, determine the total cost
of Kim's car. Round your answer to the nearest cent, if
necessary

The price of a new car is $36,000. Assume that an individual
makes a down payment of 25% toward the purchase of the car and
secures financing for the balance at the rate of 8%/year compounded
monthly. (Round your answers to the nearest cent.) (a) What monthly
payment will she be required to make if the car is financed over a
period of 24 mo? Over a period of 48 mo? (b) What will the interest
charges be if she...

You have saved $5,000 for a down payment on a new car. The
largest monthly payment you can afford is $450. The loan will have
a 9% APR based on end-of-month payments.
What is the most expensive car you can afford if you finance it
for 48 months? Do not round intermediate calculations. Round your
answer to the nearest cent.
$
What is the most expensive car you can afford if you finance it
for 60 months? Do not round...

You have saved $3,000 for a down payment on a new car. The
largest monthly payment you can afford is $350. The loan will have
an 8% APR based on end-of-month payments.
What is the most expensive car you can afford if you finance it
for 48 months? Do not round intermediate calculations. Round your
answer to the nearest cent.
What is the most expensive car you can afford if you finance it
for 60 months? Do not round intermediate...

Christie is buying a new car today and is paying a $7500 cash
down payment. She will finance the balance at 7.25 percent
interest. Her loan requires 36 equal monthly payments of $450 each
with the first payment due 30 days from today. Which one of the
following statements is correct concerning this purchase?
A. The future value of the loan is equal to 37 x 450.
B. The present value of the car is equal to $7500 + (36...

You have saved $3,000 for a down payment on a new car. The
largest monthly payment you can afford is $300. The loan will have
a 10% APR based on end-of-month payments.
A.What is the most expensive car you can afford if you finance
it for 48 months? Do not round intermediate calculations. Round
your answer to the nearest cent.
B. What is the most expensive car you can afford if you finance
it for 60 months? Do not round...

You have saved $5,000 for a down payment on a new car. The
largest monthly payment you can afford is $400. The loan will have
a 15% APR based on end-of-month payments. What is the most
expensive car you can afford if you finance it for 48 months? For
60 months? Do not round intermediate calculations. Round your
answers to the nearest cent.

PV AND LOAN ELIGIBILITY
You have saved $4,000 for a down payment on a new car. The
largest monthly payment you can afford is $350. The loan will have
a 8% APR based on end-of-month payments.
What is the most expensive car you can afford if you finance it
for 48 months? Do not round intermediate calculations. Round your
answer to the nearest cent.
$
What is the most expensive car you can afford if you finance it
for 60...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 8 minutes ago

asked 10 minutes ago

asked 26 minutes ago

asked 30 minutes ago

asked 41 minutes ago

asked 46 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago