You have just purchased a new car! You made a down payment of $5,000 and financed the balance. According to the purchase agreement, you must pay $600/month for four years, beginning one month from today. The credit agreement is based on an annual interest rate of 12%. What was the cost of the car? Select one: O a. 6,822 O b. 22,784 с.27 ,784 d. 28,800 e. None of the above O
Q: DO IT IN EXCEL, AND SHOW THE FORMULAS The company purchases a machine, its cost of $726,000 will be…
A: Present Value of annuity refers to the value of cash flows today of a series of equal cash flows or…
Q: 1. How much money you must invest today in order to withdraw ? 1,000 per year for 10 years, if the…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: You are financing a car worth $29039.30 including tax. The interest rate is 10.8% compounded daily.…
A: Loan amount (L) = $29039.30 - $1700 = $27339.30 Interest rate = 10.8% daily compounding (m = 365) n…
Q: 1. You are making car payments of $315/month for the next 3 years, you know that your car loan has…
A: In order to finance the purchase of an asset individual can take loan from the bank and repay the…
Q: What is the amount of interest paid?
A: Interest is the cost of borrowing a loan. It is the excess amount over the principal borrowing. It…
Q: u paid $10,000 for a car whose value is depreciating by 15% per year, compounded annually. Assuming…
A: Depreciation : Depreciation is the reduction in the cost of the assets due its day to day use and…
Q: The annual income from a rented house is $24,000. The annual expenses are $6,000. If the house can…
A: Given: The rate of interest = 12% The present value (PV) = $18,000 It includes 30 monthly…
Q: What monthly payment will be required for the individual to make if the car is financed over a…
A: Compound interest is the amount of interest paid on interest which will grow the interest on loans…
Q: Biden has purchased a new piano for $5,000. He made a downpament of $500. He paid the balance by a…
A: Loan is the debt borrowed by the financial institute. Monthly payment (Pmt) Formula:…
Q: Patrick J. just purchased a Zündapp Janus (a model and brand of car) for $4,000. He agreed to pay…
A: The real interest that an investor earns on the investment and a borrower pays on loan after…
Q: A commercial bank will loan you $27,000 for five years to buy a car. The loan must be repaid in 60…
A: EMI or equated monthly installment is referred to as an amount payable, which is paid in each and…
Q: Two years ago you purchased a new SUV. You financed your SUV for 60 months (with payments made at…
A: a) Monthly payment "PMT" = $617.16 Monthly interest rate "r" = 5.9%/12 Number of payments to be made…
Q: You purchase a plot of land worth $54,000 to create a community garden. To do so, you secure a…
A: Future value of a present amount With present value (PV), discount rate (r) and period (n), the…
Q: A refrigerator sold for $500. The store financed the refrigerator by charging 0.5% monthly interest…
A: Given information:Selling price of refrigerator=$500Interest rate=0.5%No. of installments=30a)…
Q: An auto dealer agrees to sell a used car for $1,000 down and payments for 3 years at $550 per month.…
A: according to the question given, downpayment = $1000 monthly payment (A) = $550 interest rate (R) =…
Q: You are considering the purchase of a new car. You can afford a payment of $400 per month. You plan…
A: In the given problem we are considering to buy a new car and we want to know how much money we can…
Q: Polly purchased car. She paid ₱ 150,000.00 as down payment and ₱5,500.00 payable at the beginning of…
A: periodic rate is the interest rate for a specific time period. the interest rate quoted for a loan…
Q: 2. You bought a $30,000.00 machine with $6,000.00 down payment and agreed to pay for the rest at 1%…
A: The question is based on the concept of Financial Management. Annuity refers to the amount of equal…
Q: 1. A mother borrowed 200,000 with 2% interest monthly and promised to pay the amount by 30 equal…
A: Loan amount = 200,000 Monthly interest = 2% Number of monthly payments = 30
Q: Suppose that you have decided to buy a certain car that costs $28,950, including taxes and license…
A: Monthly Payment refers to the payment that is to be paid monthly for a specific period of time to…
Q: 1. You and the dealer have agreed upon the purchase price for a new automobile. The purchase price…
A: Loan: It is the amount that the lender gives to the borrower & in return charge interest on…
Q: The truck that we will use in our business costs $90,000. 10% of this cost will be paid as a down…
A: A loan amortization is used present monthly PMTs, interest repaid, and principal repaid.
Q: A used car dealer advertises financing at 0% interest over 3 years with monthly payments. You must…
A: Effective annual rate: It is the rate which is compounded annually.
Q: You have just purchased a new automobile costing $24000. the trade-in you have is valued at $6000.…
A: After trade in value the cost remains at $24000 -$6000 = $18000. This much needs to be financed. The…
Q: Suppose that you decide to buy a car for $31,635, including taxes and license fees. You saved $8000…
A: given, down payment = $8000 therefore loan amount = $31635 - $8000 = $23635 P=23635 R=7.59% N=12 T=3…
Q: a refrigerator for P500 down and P300 per month for 24 months. The same brand of refrigerator could…
A: The given problem can be solved using RATE function in excel. RATE function computes interest rate…
Q: executive is going to purchase a vacation property for investment purposes. She needs to borrow…
A: The given problem can be solved using FV function in excel. FV function computes outstanding loan…
Q: A car is advertised with a price of $42291. The payment plan to own a car is $468 per month for 4…
A: Interest amount = Total payment - Principal amount
Q: PLEASE USA BA II WHEN POSSIBLE. A construction company takes a loan of $1,732,000 to cover the cost…
A: Loan amount (PV)=$1,732,000 Duration (n)=5*12=60 periods Rate per period (i)=8.55%12=0.007125…
Q: You want to buy a new car, but you can make an initial payment of only $1,300 and can afford monthly…
A: Monthly interest = APR /Number of months Monthly interest = 9%/12 Monthly interest = 0.75%
Q: A car is to be purchased in monthly payments of P17,000 for 4 years starting at the end of 4 months.…
A: The present value is the value of the sum received at time 0 or the current period. It is the value…
Q: A new car is purchased for $10,000 with a 0% down, 9% interest rate loan. The loan’s length is 4…
A: Using excel PV function
Q: The furniture store offers you no-money-down on a new set of living room furniture. Further, you may…
A: This is an example of amortization in which the loan amounts are repaid in equal installments over a…
Q: A contractor decided to borrow $7000 from a bank in order to buy an equipment for his company. The…
A: The arithmetic gradient formula is an important time value of the money method that determines the…
Q: You bought a used car for $4,000.00 at a nominal interest rate of 6%. You agreed to pay for the car…
A: The loan is a value that is borrowed from external sources like banks and this amount is repaid…
Q: Johan wants to buy a car on hire purchase for N$49000 at the rate of 12% p.a. repayable using…
A: Payment of loan installments are based on the concept of compounding and time value of money. Here…
Q: A car is advertised with a price of $41345. The payment plan to own a car is $416 per month for 3…
A: Given: Car price = $41,345 Payment per month = $416 Period = 3years
Q: You have just purchased a new automobile costing $24000. the trade-in you have is valued at $6000.…
A: The given problem can be solved using PMT function in excel. PMT computes equal payments for given…
Q: A friend of yours just bought a new sports car with a $5,000 down payment,and her $30,000 car loan…
A: The upside down is a situation in which the loan amount of good is more than the market value of the…
Q: You want a new car. At the dealership, you find a car that you like. The dealership gives you two…
A: Present Value of Annuity = P x [1 - {1 / (1 + r)^n}] / r Here, P = Periodic Annuity Payment i.e.…
Q: Suppose you purchase an automobile for a selling price of $1,600,000. You make a down payment of 5%…
A: The total cost of an automobile includes the selling price of an automobile, sales tax, and license…
Q: You are ready to buy a new car. You can afford to repay $300 each month for 60 months (paid at the…
A: In this question we require to calculate the amount we can spend on car i.e. present value of the…
Q: Answer the following probiems: 1. The buyer of a car pays P 169,000 cash and P 12,000 every month…
A: Solution:- Cash price means the amount payable in today’s terms. So, cash price = Down payment +…
Q: Dave Krug finances a new automobile by paying $5,500 cash and agreeing to make 20 monthly payments…
A: Present Value- The value of an investment or amount today is referred to as its present value. It is…
Q: A computer chip designer purchased a car for $54,676.47, which induded sales tax and registration. f…
A: Given that, Loan (PV)=$54,676.47 Duration (n)=5*12=60 periods Rate of interest (i)=4.5%/12=0.00375…
Q: 1. A car costs Php 1,400,000. Suppose a man gives a down payment of Php 400,000 for the car, and…
A: Loan amount (L) = Php 1400000 - Php 400000 = Php 1000000 r = 5% per annum = 0.4167% per month n = 10…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from the bank in the amount of $310,000. The terms of the loan are 6.5% annual interest rate, payable in three months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on February 24, and the entry for payment of the short-term note and final interest payment on April 24. Round to the nearest cent if required.
- Using the information provided, what transaction represents the best application of the present value of an annuity due of $1? A. Falcon Products leases an office building for 8 years with annual lease payments of $100,000 to be made at the beginning of each year. B. Compass, Inc., signs a note of $32,000, which requires the company to pay back the principal plus interest in four years. C. Bahwat Company plans to deposit a lump sum of $100.000 for the construction of a solar farm In 4 years. D. NYC Industries leases a car for 4 yearly annual lease payments of $12,000, where payments are made at the end of each year.Now assume that it is several years later. The brothers are concerned about the firm’s current credit terms of net 30, which means that contractors buying building products from the firm are not offered a discount and are supposed to pay the full amount in 30 days. Gross sales are now running $1,000,000 a year, and 80% (by dollar volume) of the firm’s paying customers generally pay the full amount on Day 30; the other 20% pay, on average, on Day 40. Of the firm’s gross sales, 2% ends up as bad-debt losses. The brothers are now considering a change in the firm’s credit policy. The change would entail: (1) changing the credit terms to 2/10, net 20, (2) employing stricter credit standards before granting credit, and (3) enforcing collections with greater vigor than in the past. Thus, cash customers and those paying within 10 days would receive a 2% discount, but all others would have to pay the full amount after only 20 days. The brothers believe the discount would both attract additional customers and encourage some existing customers to purchase more from the firm—after all, the discount amounts to a price reduction. Of course, these customers would take the discount and hence would pay in only 10 days. The net expected result is for sales to increase to $1,100,000; for 60% of the paying customers to take the discount and pay on the 10th day; for 30% to pay the full amount on Day 20; for 10% to pay late on Day 30; and for bad-debt losses to fall from 2% to 1% of gross sales. The firm’s operating cost ratio will remain unchanged at 75%, and its cost of carrying receivables will remain unchanged at 12%. To begin the analysis, describe the four variables that make up a firm’s credit policy and explain how each of them affects sales and collections.You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
- Del Hawley, owner of Hawleys Hardware, is negotiating with First City Bank for a 1-year loan of 50,000. First City has offered Hawley the alternatives listed here. Calculate the effective annual interest rate for each alternative. Which alternative has the lowest effective annual interest rate? a. A 12% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year b. A 9% annual rate on a simple interest loan, with a 20% compensating balance required and interest due at the end of the year c. An 8.75% annual rate on a discounted loan, with a 15% compensating balance d. Interest figured as 8% of the 50,000 amount, payable at the end of the year, but with the loan amount repayable in monthly installments during the yearA student is buying a new car. The car’s price is $37,500, the sales tax is 6%, and the title, license, and registration fee is $1250 to be paid in cash. The dealer offers to finance 95% of the car’s price for 48 months at a nominal interest rate of 9% per year, compounded monthly. (a) How much cash is paid when the car is purchased? (b) How much is the monthly payment?A new engineer buys a car with 0% down financing from the dealer. The cost with all taxes, registration, and license fees is $15,732. If each of the 48 monthly payments is $398, what is the monthly interest rate? What is the effective annual interest rate?
- You have just purchased a new automobile costing $24000. the trade-in you have is valued at $6000. the purchase will be financed with a 3% loan which will be repaid over 5 years with monthly payments. determine a.) monthly payment b.) the total interest you will pay the loan over the 5 year period, and c.) the loan balance after the 48th payment. Ignore parts b and c1. You and the dealer have agreed upon the purchase price for a new automobile. The purchase price is $38,000. In addition, sales tax of $2,280, a documentation fee of $500 is added to you purchase price. You make an initial payment of $5,000 and seek to finance the remaining balance. Your automobile dealer has a finance opportunity which will allow you to defer your first payment for 6 months. Your car payments will be paid each monthly over a 3-year period beginning the first month after the 6 months deferral period. The interest rate is 6% per year for the duration of the loan and interest accrue monthly during the 6 months' deferral period. a. Draw the cash flow diagram from your perspective. b. What are your monthly payments? You decide to pay off your loan when you make your 24th payment. What will be your total 24th payment?You purchase a vehicle for $25,000 at an 8% APR. Your loan term is 72 months. After one year of making payments, how much do you still owe on the vehicle? $21,617 $32,532 $19,740 $20,359