You are deciding to buy a car to commute to work given the comparatively low interest of 6% per year. You estimate that for the next five years you will be able to allocate $200 monthly towards repayment of the vehicle and a final lump sum of $1000 at the end of five years. Based, on this estimate, how much would you be able to borrow to finance your car?

Q: Supposed you want to buy a used car but your savings is not enough. To do this, you borrow P60,000…

A: Loan amortization is the process of scheduling out a fixed-interest rate loan into scheduled…

Q: what is the largest down payment you can make at the end of three years (immediately after the last…

A: Value at the end of saving period comprises of monthly saving and interest on those savings.…

Q: Suppose you borrow 11,000 for 5 years at 6% towards the purchase of a car. What would be the monthly…

A: The computation of monthly payments:Hence, the monthly payment is 212.66.

Q: Assuming that the dealership offers you 5-year loan at 4.7% compounded monthly, what payments would…

A: The question is based on the concept of Annuity in Financial Management. Annuity refers to the…

Q: Suppose you buy a $40,000 car and you 'put down' $5,000 and finance the rest for 72 months at 3.75%…

A: Solution:- When a loan is taken, the amount can be repaid as a lump sum payment or in instalments.…

Q: You are about to purchase a new car and have two options to pay for it. You can pay $20,000 in cash…

A: Ordinary annuity are the PMTs which are made at the end of the period.

Q: You are on your way to the local automobile outlet to buy a car. The price of the car is $20,000.…

A: To prepare the amortization table, we first need to calculate the annual payment, which can be…

Q: A man plans to take a vacation in 5 years. He wants to buy a certificate of deposit for $1300 that…

A: To calculate the simple interest rate we will use the below formula   Interest rate = [(A-P)/P]/T…

Q: You want to buy a new car. You can afford payments of $275 per month and can borrow the money at an…

A: Borrowing amount would be considered as the amount considered after interest over the period of…

Q: You can afford payments of $950 per month for the purchase of a house. a) What is the largest…

A: Given details, Monthly payments, C = $950Interest rate, r = 3.2% p.a.  or 0.267% per month (3.2%…

Q: When you purchase your car, you take out a five-year annual-payment loan with an interest rate of…

A: Here we will first have to determine the amount of loan taken. We are provided with annual payments,…

Q: What is the annuity payment?

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: You want to borrow $73,000 from your local bank to buy a new sailboat. You can afford to make…

A: Given information: Present value is $73,000 Monthly payment of $1,450 Number of periods is 60

Q: You are planning to buy a new car/truck (of your dreams) 7 years’ time at a cost of $134,956. How…

A: Here, The monthly rate of interest is 'r' Number of months is 'n'

Q: 1. Nelson wants to buy a car that costs $42,000. He has arranged to borrow the total purchase price…

A: Using the PMT function in excel

Q: You are considering buying a new car worth $I5,000. You can finance the car either by withdrawing…

A: The present worth an investment is based on the time value of money concept. The present value of…

Q: You want to borrow $75,000 from your local bank to buy a new sailboat. You can afford to make…

A: The given problem can be solved using RATE function in excel. RATE function provides interest rate…

Q: Hudson would like to purchase a new car for $25,000.  How much will his monthly payments be if he…

A: The monthly payment amount can be calculated with the help of present value of annuity function

Q: You buy a ten-year-old car for $12,000. You decide to pay $2000 down, and the used car dealer gives…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Suppose you wanted to buy a $200,000 house. You have $30,000 cash to use as the downpayment. The…

A: Given PV = amount of loan = 200000-30000 = $ 170000 r = rate of interest = 6/12 = 0.05 n = number of…

Q: You plan to buy a new car. The price is $30,000 and you will make a down payment of $4,000. Your…

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: You are buying a $10,000 second hand car with a down-payment of $3,000 and you finance the remaining…

A: Solution:- When a loan is taken, generally equal periodic installments are paid inclusive of…

Q: You would like to buy a house that costs $350,000. You have $50,000 in cash that you can put down on…

A: PV is the current worth of cash flows that are expected to occur in the future.

Q: You want to borrow $94,000 from your local bank to buy a new sailboat. You can afford to make…

A: Loan is an agreement between lender and borrower where lender provide funds to borrower which repaid…

Q: You want to save money from your businessoperation to replace a truck that has been used indelivery.…

A: Given information: Replacement cost after 12 years is $60,000 Number of years is 12, Interest rate…

Q: You want to save the down payment required to purchase a vacation home at the end of four years. If…

A: FUTURE VALUE OF ANNUITY  (FVA) FORMULA: FVA=A×1+rn-1r where, r=rate of interest n = number of years…

Q: You can afford to pay $15,000 at the end of each of the next 30 years to repay a home loan. If the…

A: Present value of annuity is the current worth of future annual cash flows over a period of time at a…

Q: se price of the house, and you are looking at a 20 year loan at 6.12% interest compounded monthly.…

A: Maximum price = Down payment amount + Present value of mortgage payment

Q: You are thinking about buying a rental property. Because of the difficulty getting a loan, you are…

A: Given data; Initial payment = $350,000 number of years = 10 monthly received cash = $1400 selling…

Q: You are thinking of purchasing a house. The house costs $400,000. You have $57,000 in cash that you…

A: Down payment  It is the payment generally made in cash, in the early stages of the purchase of both…

Q: Rick wishes to purchase a new car and can afford monthly payments of up to $275 per month. Finance…

A: Time value tells the value received today by an individual is of more worth than the exact 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: Kristi Perez puts $10,500 into an account to save money to buy a car in 12 years. She expects the…

A: We require to calculate the interest rate from following details given in the question: Current…

Q: In order to purchase a brand new set of living room furniture, you take out a loan from the bank at…

A: Cash price is the present value of quarterly payment made at the of the quarter.

Q: You have an outstanding student loan with required payments of $500 per month for the next four…

A: Here, Lottery Amount is $10,000

Q: You would like to buy a house that costs $350,000. You have $50,000 in cash that you can put down on…

A: Here,

Q: Someone offers to buy your car for four, equal annual payments, beginning 2 years from today. If you…

A: We use PMT function to calculate annual payments

Q: Todd is able to pay $360 a month for 6 years to finance a car purchase.  a. If the interest rate is…

A: Per month payment=$360Number of months=6×12=72Rate per month=6% compounded monthly

Q: You are planning to build a vacation home.  Your rich uncle offers you a $35,000 loan at 10.5%…

A: The number of years that will take to pay off the loan at given interest rate can be calculated by…

Q: You want to buy a $210,000 home. You plan to pay $10500 as a down payment, and take out a 30 year…

A: To find the loan amount one has to deduct the down payment from the total loan amount.

Q: what price of car can you afford?

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: You want to buy a new car. You can afford payments of $275 per month and can borrow the money at an…

A: Computation of Present value is as follows: Explanation of Computation of Present Value is as…

Q: You buy a car for $34,000.  You pay $10,000 down and finance the rest at 3% monthly over five years.…

A: Value of Car is $34,000 Down Payment is $10,000 Loan Amount (PV) is: Interest Rate (Rate) is 3%…

Q: You are interested in a car which costs $25,000. You have a $2000 down payment, and you have a found…

A: A loan is amortized by paying equal monthly installments comprising Principal and interest. Total…

Q: Dan is contemplating trading in his car for a new one. He can afford a monthly payment of at most…

A: The most expensive car that Dan might be able to afford shall be: = Amount received on trade-in +…

Q: You have a down payment of $10,000 saved up to purchase a new vehicle. If you are also approved for…

A: Down payment for a purchase is the immediate cash amount paid by the buyer. A series of payments of…