Rounded to the nearest dollar, how large of a down I can purchase this jet under acceptable terms?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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I would like to buy a Cessna Citation M2 private jet, which costs $4,700,000. I am
going to get a loan to make this purchase but I won't agree to any terms that force
me to spend more than $1,000,000 in interest over the life of the loan (I am
simultaneously very wealthy yet also a bit of a penny pincher). I am approved for an
eight year aviation finance loan at 6.4% APR, compounded monthly. I am fine with
any monthly payment amount. Rounded to the nearest dollar, how large of a down
payment should I make so that I can purchase this jet under acceptable terms?
$1,340,283
None of these
$985,284
$1,133,125
Transcribed Image Text:I would like to buy a Cessna Citation M2 private jet, which costs $4,700,000. I am going to get a loan to make this purchase but I won't agree to any terms that force me to spend more than $1,000,000 in interest over the life of the loan (I am simultaneously very wealthy yet also a bit of a penny pincher). I am approved for an eight year aviation finance loan at 6.4% APR, compounded monthly. I am fine with any monthly payment amount. Rounded to the nearest dollar, how large of a down payment should I make so that I can purchase this jet under acceptable terms? $1,340,283 None of these $985,284 $1,133,125
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