Money and Points

1414 WordsFeb 10, 20136 Pages
You submitted this Assignment on Sun 10 Feb 2013 2:33 AM PST. You got a score of 50.00 out of 100.00. You can attempt again, if you'd like. ------------------------------------------------- Top of Form Please read all questions and instructions carefully. Note that you only need to enter answers in terms of numbers and without any symbols (including $, %, commas, etc.). Enter all dollars without decimals and all interest rates with up to two decimals. Read the syllabus for examples. The points for each question are listed in parentheses at the start of the question, and the total points for the entire assignment adds up to 100. Question 1 (5 points) Qin deposits his first paycheck in the bank. The annual interest rate is 12%, but…show more content…
Understanding the problem first is the key, and using time lines is the main way you will. Question 9 (15 points) Two years ago, you purchased a $20,000 car, putting $4,000 down and borrowing the rest. Your loan was a 48-month fixed rate loan at a stated rate of 6% per year.You paid a non-refundable application fee of $100 at that time in cash. Interest rates have fallen during the last two years and a new bank now offers to refinance your car by lending you the balance due at a stated rate of 4% per year. You will use the proceeds of this loan to pay off the old loan. Suppose the new loan requires a $200 non-refundable application fee. Given all this information, should you refinance? How much do you gain/lose if you do? Your Answer | | Score | Explanation | (no, lose 25) | ✔ | 15.00 | Correct decision, and calculation correct. You are thinking right. | Total | | 15.00 / 15.00 | | Question Explanation This is an even more realistic version of the mortgage problem. Think carefully about time lines and relevant interest rates to make different calculations. Question 10 (15 points) You are interested in a new Ford Taurus. After visiting your Ford dealer, doing your research on the best leases available, you have three options. (i) Purchase the car for cash and receive a $1,500 cash rebate from Dealer A. The price of the car is $15,000. (ii) Lease the car from Dealer
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