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- After deciding to acquire a new car, you realize you can either lease the car or purchase it with a two-year loan. The car you want costs $34,000. The dealer has a leasing arrangement where you pay $97 today and $497 per month for the next two years. If you purchase the car, you will pay it off in monthly payments over the next two years at an APR of 6 percent. You believe that you will be able to sell the car for $22,000 in two years. What is the present value of purchasing the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value of lease $ What is the present value of leasing the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value of purchase $ What break-even resale price in two years would make you indifferent between buying and leasing? (Do not round intermediate calculations and round your answer to 2…After deciding to acquire a new car, you can either lease the car or purchase it with a three-year loan. The car you want costs $37,000. The dealer has a leasing arrangement where you pay $2,400 today and $580 per month for the next three years. If you purchase the car, you will pay it off in monthly payments over the next three years at an APR of 6 percent. You believe that you will be able to sell the car for $22,000 in three years. a. What is the present value of leasing the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value of purchasing the car? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What break-even resale price in three years would make you indifferent between buying and leasing?After deciding to buy a new car, you can either lease the car or purchase it on a three-year loan. The car you wish to buy costs $35,000. The dealer has a special leasing arrangement where you pay $99 today and $499 per month for the next three years. If you purchase the car, you will pay it off in monthly payments over the next three years at a 6% APR. You believe you will be able to sell the car for $23,000 in three years. All final answers are rounded to the nearest dollar. Choose all correct statements from the below. Question 6 options: If you sell the car after three years, the PV of purchasing the car is $15,780. Purchasing is always preferable if the APR is below 6%. The PV of leasing the car is $17,502. If the APR increases to 8.4%, you should lease the car. You should lease the car given that the PV of leasing is higher.
- Tim smith is shopping for a used luxury car. He has found one priced at $27,000. The dealer has told Tim that if he can come up with a down payment of $4,800, the dealer will finance the balance of the price at a 8% annual rate over 3 years (36 months). Assuming that tim accepts the dealer's offer, what will his monthly ( end of month) payment amount be? What will Tim's monthly payment be if the dealer were willing ot finance the balance of the car price at an annual rate of 3.1%?Easton has two options for buying a car. Option A is 1.5% APR financing over 36 months and Option B is 5.5% APR over 36 months with $1800cash back, which he would use as part of the down payment. The price of the car is $35,042 and Easton has saved $3500 for the down payment. Find the total amount Easton will spend on the car for each option if he plans to make monthly payments. Round your answers to the nearest cent, if necessary. Option A: $ Option B: $Jessie is considering purchasing a new car for $30,000. The dealer is offering 2 options on the purchase: Option 1. Receive a $5,000 rebate on the price of the car and finance the balance over 5 years at 4% interest. or Option 2. Finance the vehicle for 6 years at 0% interest but no interest. Question: What is the the monthly payment that Jessie has to pay for option 1?Question: What is the total cost of the cash rebate option (option 1)?Question: What is the the monthly payment that Jessie has to pay for option 2?Question: Which option would you recommend? Why?
- Someone offers to buy your car for four, equal annual payments, beginning 2 years from today. If you think that the present value of your car is $9,000 and the interest rate is 10%, what is the minimum annual payment that you would accept?Denzel needs a new car. At the dealership, he finds the car that he likes. The dealership gives him two payment options:1. Pay $35,000 for the car today.2. Pay $4,000 at the end of each quarter for three years.Required:Assuming Denzel uses a discount rate of 12% (or 3% quarterly), determine which option gives him the lower cost.he price of a new car is $16,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 5%/year compounded monthly. (Round your answers to the nearest cent.) (a) What monthly payment will she be required to make if the car is financed over a period of 36 months? Over a period of 60 months? 36 months $ 60 months $ (b) What will the interest charges be if she elects the 36-month plan? The 60-month plan? 36-month plan $ 60-month plan $
- A. If i buy a car from a dealership for $27000 with 2.5% paying monthly for a total of 3 years how much will i owe? B. If i buy a car from the dealership with 2% APR for 60 months with sticker price of $30,000 how much will i owe? C. If i buy the car for 10,000 with 10% interest for 6 years how much would it cost. Which option is better?Your brother has decided to purchase a new automobile with a hybrid-fueled engine and a six-speed transmission. After the trade-in of his present car, the purchase price of the new automobile is $30,000. This balance can be financed by the auto dealership at 2.9% APR and payments over 48 months. Compounding of interest is monthly. Alternatively, he can get a $2,000 discount on the purchase price if he finances the loan balance at an APR of 8.9% over 48 months. Should your brother accept the 2.9% financing plan or accept the dealer’s offer of a $2,000 rebate with 8.9% financing?After you purchase the house, you decide to do some remodeling in the kitchen. You ask your parents if they would lend you money, but you insist on paying them interest. The agreement is that they will lend you $6000.00 at a simple interest rate of 3% per year. Once the interest amounts to $300, you agree to pay them back the $6000 plus the $300 interest. After how many months will you have to pay them back? Be sure to show all of your work.
