Question

Problem 5.26

PV AND LOAN ELIGIBILITY

You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $400. The loan will have a 8% 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 intermediate calculations. Round your answer to the nearest cent.

Answer #1

1- | if period is 48 months | |||

Down payment you have accumulated | 3000 | |||

present value of monthly payment | Using present value function in MS excel | pv(rate,nper,pmt,fv,type) rate = 8/12 = .666% nper = 48 pmt =-400 fv =0 type =0 | PV(0.666%,48,-400,0,0) | $16,387.3 |

maximum price you can afford | 3000+19387.29 | $19,387.3 | ||

2- | if period is 60 months | |||

Down payment you have accumulated | 3000 | |||

present value of monthly payment | Using present value function in MS excel | pv(rate,nper,pmt,fv,type) rate = 8/12 = .666% nper = 48 pmt =-400 fv =0 type =0 | PV(0.666%,60,-400,0,0) | $19,731.1 |

maximum price you can afford | 3000+22731.1 | $22,731.1 |

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...

PV AND LOAN ELIGIBILITY
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 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?...

10.
PV AND LOAN ELIGIBILITY
You have saved $5,000 for a down payment on a new car. The
largest monthly payment you can afford is $500. 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...

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...

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 $3,000 for a down payment on a new car. The
largest monthly payment you can afford is $300. 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? For 60 months?
Do not round intermediate calculations. Round your answers to the
nearest cent.
Financed for 48 months: $
Financed for 60 months: $

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 $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.

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.
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.
I am doing this assignment all in excel. The book mentioned
to use the "PV" function, but I am stuck...

You have saved $5,000 for a down payment on a new car. The
largest monthly payment you can afford is $350. 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? For 60 months?
Do not round intermediate calculations. Round your answers to the
nearest cent.
Financed for 48 months: $ ___
Financed for 60 months: $ ___

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