Gerritt wants to buy a car that costs $30.250. The interest rate on his loan is 5.61 percent compounded monthly and the loan is for 5 years. What are his monthly payments? Multiple Choice A. $592.10 B. $560.04 C. $608.31 D. $576.65 E. $579.35

Gerritt wants to buy a car that costs $30.250. The interest rate on his loan is 5.61 percent compounded monthly and the loan is for 5 years. What are his monthly payments? Multiple Choice A. $592.10 B. $560.04 C. $608.31 D. $576.65 E. $579.35

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 19PROB

See similar textbooks

Related questions

Q: Jay puts $40,000 down on a house that cost $275,000, calculate the monthly mortgage payment on the…

A: formula for monthly payment: pmt = p×rm1-1+rm-m×n p = principal r = rate of interest m = frequency…

Q: Tian can afford to put a down payment of $8,000 on a car. He can also afford to make monthly…

A: The time value of money is the concept that is widely used by organizations or individuals to…

Q: Bonnie and Claude want to buy a house. They can afford monthly payments of $1125.00. The bank offers…

A: The maximum amount that the bank will lend will be the present value of the monthly payments that…

Q: Fritz buys a car costing $24,300. He agrees to make payments at the end of each monthly period for 8…

A: A loan is an agreement between two parties where a sum is forwarded in return for periodic payments…

Q: What is the payoff on Angela's loan? (Round your answer to two decimal places.)

A: Loan is financial agreement where a person (lender) lends lump-sum money to other person (borrower)…

Q: Angela Montery has a five-year car loan for a Jeep Wrangler at an annual interest rate of 6.3% and a…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Blake bought a new car and financed $⁢15,000 to make the purchase. He financed the car for 60 months…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: isha is buying a car for $26,000. She has $1,800 for a down payment. She plans prrow the remainder…

A: Using the compounding technique, the future value of a sum has been used to know the future value of…

Q: Jim is buying a house for $220,000. His loan is a 15-year fixed-rate mortgage at 4%. Jim makes a 10%…

A: Borrowings are the liability that is used to finance the requirement of the funds. The borrower…

Q: Stephen has just purchased a home for $153,200. A mortgage company has approved his loan application…

A: The future value of the loan is the accumulated amount of money at present with some interest rate.…

Q: I purchase a BMW for $70,000. If I receive a trade in allowance of $5,000 for my old car. what will…

A: Given: Purchase price of BMW = $70000 Old car trade = $5000

Q: Dagmar has a 4-year car loan at an annual interest rate of 4.5%. She has made 28 payments of…

A: Pay-off amount: The amount which satisfies all the terms of the loan and completely write-off the…

Q: Joe Levi bought a home in Arlington, Texas, for $132,000. He put down 30% and obtained a mortgage…

A: Using the table above given, For a $1000 loan amount of Monthly Payment at 5% for 30 years is $5.37.…

Q: After graduating from UCF, you plan to purchase a small condominium for $100,00o. You will be…

A: Purchase Price = 100,000 Down Payment = 10%× Purchase Price = 10%×100,000 = 10,000 Loan Amount =…

Q: Jonathon wishes to buy a used Chevy Malibu for $12,500. He only has $1,000 for a down payment so the…

A: Computation as follows: Therefore, the payment amount and total interests are $286.18 per month and…

Q: Donald and Alex have a combined gross monthly income of $5500. They want to buy a house in a…

A: Maximum monthly mortgage payment refers to the amount that an individual has after considering all…

Q: Bob can afford car payments of $365 per month for 4 years. If the interest rate is 4.9 percent, how…

A: Amount he can afford to borrow is present value of monthly payments

Q: A recent college graduate buys a new car by borrowing $16,000 at 7.2%, compounded monthly, for 5…

A: Any cashflow of equal instalments can be called as an annuity. A loan with equal repayments at equal…

Q: Lucky Louie wants to buy a car that costs $26,750. The interest rate on his loan is 5.33 percent…

A: Car cost = 26750 Interest on loan = 5.33% Years = 7 Compounded = Monthly PMT find out using Excel:…

Q: suppose Tim is buying a new car. He agreed to a price of $21,000 and he has $3,500 for a down…

A: Price of car = $21,000 Down Payment = $3,500 Time Period = 6 Years Interest rate = 3.6%

Q: Todd can afford to pay $360 per month for the next 7 years in order to purchase a new car. The…

A: Formula to calculate amount afford to pay for a new car today: Value today (Present value) = Monthly…

Q: Ellen is shopping for a truck and has up to $325 to spend biweekly at a dealership in Selkirk, MB…

A: Maximum bi-weekly payment "PMT" = $325 Number of years = 25 Number of periods "NPER"= 5*52/2 = 130…

Q: You want to buy a house and will need to borrow $200,000. The interest rate on your loan is 5.23…

A: PRESENT VALUE (CURRENT MARKET PRICE) 200,000 NPER (n) = 30*12 360 INTEREST RATE (5.23%/12)…

Q: Angela Montery has a five-year car loan for a Jeep Wrangler at an annual interest rate of 6.7% and a…

A: The amount that is payoff is the amount due for remaining period of loan which is 2 years. It can be…

Q: nt a.)If his new home costs $136,000, what is his down payment? b.)How much is he going to borrow…

A: PMT function computes installment amount for given interest rate (RATE), no. of installments (NPER)…

Q: Jonathan wishes to buy a used chevy malibu for $12,500. He only has $1,000 for a down payment so th…

A: a) Value of chevy malibu = $12,500 Down payment =$1,000 Loan Amount =$12,500 -$1,000 Loan amount…

Q: Larry wants to make a decision on a six- year amortized loan for him to buy a new car. The value of…

A: It will be enough if the present value of monthly payment of $700 is equal to or more than the car…

Q: Jorge is buying a new car for $24,750. Compare the two loan offers by finding the monthly payments…

A: Purchase Price of Car = 24750 Two loan options evaluated below

Q: Big Sean is buying a new truck from Willie’s Auto Sales, the dealer is providing the financing and…

A: Calculation of monthly payment: Answer: Monthly payment is $995.40

Q: Andy wants to buy a car that costs $22,750. The dealership will finance the car for 5 years, at…

A: Loans are the debt obligations of a company that are shown on the liabilities side. These are paid…

Q: Phil can afford $240 a month for five years for a car loan. If the interest rate is 8.5 percent, how…

A: Monthly payment (P) = $ 240 Interest rate = 8.5% Monthly interest rate (r) = 8.5%/12 =…

Q: Kelly Robins is considering purchasing a usedautomobile. The price including the title and taxes…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: Taibi Hafid is considering the purchase of a used car. The price, including the title and taxes, is…

A: Loan is an agreement between lender and borrower where lender provide borrower with funds in…

Q: Jonathan wishes to buy a used Chevy Malibu for $12,500. He only has $1,000 for a down payment so the…

A: Computation:

Q: car for $18,500. Compare the two loan offers by finding the monthly payments for each and…

A: Loans are to be paid equal monthly payment that carry the payment for interest and payment for…

Q: Sebastian checks Daniel’s credit rating and determines that he will qualify for a 4% auto loan, and…

A: Cost of the car = $39,900 Trade-in Value = $8,500 Loan Amount = $39,900-$8,500 = $31,400 Years = 4…

Q: Gerritt wants to buy a car that costs $31,250. The interest rate on his loan is 5.69 percent…

A: Information Provided: Car costs = $31,250 (Present value) Interest rate on loan = 5.69% compounded…

Q: Ben and Mal Scott plan to buy a home for $272,900. They will make a 10% down payment and qualify for…

A: Purchase price of a property can be defined as the amount that should be paid to acquire a property.…

Q: Bill needs a new car and can afford monthly car payments of $400. The interest rate on new car loans…

A: Time value of money The worth of an amount today is not the same after 5 years or 5 years ago. It is…

Q: Angela Montery has a five-year car loan for a Jeep Wrangler at an annual interest rate of 5.7% and a…

A: Data given: N=5 year Interest rate = 5.7% PMT= $595.50 After 3 years, Angela decides to purchase a…

Q: Suppose that you decide to purchase a new car. You go to a credit union to get preapproval for your…

A: According to the time value of money concept, the value of the amount of money in the future is less…

Q: Phil can efford $170 a month for 5 years for a car loan. If the annual interest rate is 3.9 percent…

A: Present Value of annuity refers to the present value of all the future payments of and series of…

Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Gerritt wants to buy a car that costs $30.250. The interest rate on his loan is 5.61 percent compounded monthly and
the loan is for 5 years. What are his monthly payments?
Multiple Choice
A. $592.10
B. $560.04
C. $608.31
D. $576.65
E. $579.35

Expert Solution

Step 1

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Calculating and comparing add-on and simple interest loans. Eli Nelson is borrowing 10,000 for five years at 7 percent. Payments, which are made on a monthly basis, are determined using the add-on method. a. How much total interest will Eli pay on the loan if it is held for the full five-year term? b. What are Elis monthly payments? c. How much higher are the monthly payments under the add-on method than under the simple interest method?
Gerritt wants to buy a car that costs $31,250. The interest rate on his loan is 5.69 percent compounded monthly and the loan is for 6 years. What are his monthly payments?
Gerritt wants to buy a car that costs $30,250. The interest rate on his loan is 5.61 percent compounded monthly and the loan is for 5 years. What are his monthly payments? Multiple Choice: $608.31 $560.04 $579.35 $576.65 $592.10
Lucky Louie wants to buy a car that costs $26,750. The interest rate on his loan is 5.33 percent compounded monthly and the loan is for 7 years. What are his monthly payments?
Dagmar has a 4-year car loan at an annual interest rate of 7.5%. She has made 26 payments of $976.77. If Damar decides to pay off her loan, what is her payoff amount (in dollars)? (Round your answer to the nearest cent.)
Steven is thinking about buying a duplex. His monthly expenses will be $888 for the mortgage, $480 for taxes, and $420 for insurance period he also needs to pay a yearly association fee of $888.00. If he can rent out 1/2 of the unit for $1535 per month, how much will he make or lose per month? Loss of $60. Loss of $1120. Loss of $327.
Peter has borrowed $8,600 to pay for his new car. The annual interest rate on the loan is 7.4 percent, and the loan needs to be repaid in four payments. What will be his annual payment if he begins his payment today now? (Round to the nearest dollar.) a. $2,850 b. $2,656 c. $2,385 d. $2,448
Dagmar has a 4-year car loan at an annual interest rate of 4.5%. She has made 28 payments of $979.77. If Dagmar decides to pay off her loan, what is her payoff amount (in dollars)? (Round your answer to the nearest cent.)
Aidan wants to pay off the loan on his refrigerated trailer on which he has made 15 payments. If Aidan's monthly payment is $347.79 on a 3-year loan at an annual percentage rate of 4.5%, what is the payoff amount (in dollars)? (Round your answer to the nearest cent.)
Gerritt wants to buy a car that costs $27,000. The interest rate on his loan is 5.35 percent compounded monthly and the loan is for 5 years. What are his monthly payments? Multiple Choice (select the correct answer) $511.58 $539.56 $496.74 $513.86 $524.73
Steven wants to buy a new couch priced at $591 and agrees to pay for it over two years with a finance charge of 4.3% simple annual interest. How much will his monthly payment be? State your answer in terms of dollars rounded to the nearest cent (hundredth). Carl purchased a $385 car stereo at Worst Buy. He paid $25 at the time of purchase and agreed to pay the balance in 12 equal monthly payments. The finance charge was 14% simple annual interest. What was the amount of each payment? State your answer in terms of dollars rounded to the nearest cent (hundredth). Sammy wants to buy a new stereo priced at $449. He enters into an agreement to pay $21 a month for 24 months. How much will the finance charge be for this purchase?
Aidan wants to pay off the loan on his refrigerated trailer on which he has made 15 payments. If Aidan's monthly payment is $387.79 on a 3-year loan at an annual percentage rate of 5.5%, what is the payoff amount (in dollars)? (Round your answer to the nearest cent. See Example 10 in this section.)