Please answer the both Question. Your friend is willing to buy your Ford F-150 in 4 years. You bought the truck for$50,000 and he is willing to pay you 60% of that price in 4 years. What is yourfriend's offer worth today given a 7.5% interest rate?$24,217$23,320O None of the options listed$22,464$25,157You have budgeted $350 per month for a car payment. What is the maximumamount you can spend on a car given a 4.5% interest rate over 4 years?None of the options listed$15,349$17,541$21,926$19,734

Cost of Truck $50,000 Selling Price after 4 years ($50,000 * 60%) $30,000 Present value of $1 at…

Answered: Your friend is willing to buy your Ford…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 20PROB

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Similar questions

Some laboratory equipment sells for $85,000. The manufacturer offers financing at 6% with annual payments for 5 years for up to $65,000 of the cost. The salesman is willing to cut the price by 10% if you pay cash. What is the interest rate you would pay by financing
Suppose that you have decided to buy a certain car that costs $28,950, including taxes and license fees. The dealership gives you two financing options: 1) Option A: The dealership takes $800 off the price of the car. You must make a down payment of $2000 and can finance the rest at 2.99% APR for 72 months. a) How much will you be financing? b) How much will your monthly payments be under this option? (Round to the nearest dollar.) c) How much total money will you pay under this option? (Don’t forget to include your down payment.) 2) Option B: The dealership takes $1000 off the price and 0% financing for 36 months. a) How much will you be financing? b) How much will your monthly payments be under this option? (Round to the nearest dollar.) c) How much total money will you pay under this option? 3) Would you choose option A or option B? Why?
You have decided to buy a car with price tag of $30,000 but you are able to negotiate the price down to $28,000. You have $1,000 saved, so you need to borrow $27,000 in a 5-year loan from your bank (your bank offers lower rates than the auto-dealer) at a 3% APR (annual rate). How much will you owe to the bank after 2 years?
You are planning on buying a new vehicle in 5 years after you receive your PhD. You plan on spending $35,600 for the car. Even though you are still in school. You think you can put some money aside each year because you work as a lab assistant and have a well-paying summer job. Your EGM 320 instructor said you could consider an interest rate of 6.5% each year as the market interest rate. How much do you have to set aside each year to have the amount of cash to pay for the car?
4. You wish to purchase a house that costs $294,000, and the bank requires you to have 12% of the purchase price as a down payment. Your annual salary is $44,000 and you can save 18% of this salary every year. How long will it take for you to save for the required down payment? about _____ years?
You are thinking about buying a rental property. Because of the difficulty getting a loan, you are going to pay $350,000 in cash for the house today. You think you can rent out the property for the next 10 years, receiving $1,400 in cash each month after your expenses and taxes. At the end of ten years, you believe you will be able to sell the property for $425,000. If your discount rate is 7.2% annually with monthly compounding, what is the NPV of the rental property? (Assume first payment is 1 month from today)
Imagine you received two offers. You need to decide which one means more money for you! OFFER #1: Right away, you receive $2,490,000. Also, you will receive 40 back-to-back payments of $1,245, 000 each, six months apart, and the first one of these will take place in one year. The discount rate is 10 percent, with daily compounding. OFFER #2: Right away, you receive $25 million. And nothing else in the future. To make your decision, you need to first figure out how much Offer #1 is worth to you in today's dollars. The answer is: $____ . ( Assume thirty days in each month and twelve months in each year.) (Do not round intermediate calculations. Round your final answer to 2 decimal places, e.g., 12.34.)
A notoriously haunted house in Tampa has come on the market with a sales price of $150,000. Believing this to be a steal for your family, you think you can buy the home at that price and finance $125,000 for 15 years at a 5% interest rate. What would your monthly payment be? In Excel.
You are planning to purchase a house that will require a mortgage of $400,000. You find 2 mortgage offers both at the same rate of 2.75%. One is a 30-year mortgage and the other is a 20-year mortgage. You know, without any computation, that the 30-year mortgage will have lower monthly payments than the 20-year mortgage since the rates are the same. A friend advised that before taking the 30-year mortgage offer, you do some mathematical calculations to see if your budget can handle the extra amount of monthly payment for the 20-year mortgage. What is the difference in the monthly payment? Be sure to show all of your work.
You want to buy a car. A dealership in town has the SUV you want to buy for $22,510. Your first financing option is to make a down payment of $2500 and finance the rest at 2.99% APR for 72 months. How much will you be financing? $ How much will your monthly payments be under this financing option? (Round to the nearest dollar.) $ How much total money will you pay for the SUV at the end of the 72 months under this financing option? (Don't forget to include your down payment in this total amount.) $
Suppose that you decide to buy a car for $61,000, including taxes and license fees. You saved $11,000 for a down payment. The dealer is offering you a choice between two incentives. Incentive A is $6000 off the price of the car, followed by a four-year loan at 6.83%. Incentive B does not have a cash rebate but provides free financing (no interest) over four years. What is the difference in monthly payments between the two offers? Which incentive is the better deal? Use PMT=P(R/N)/1−(1+r/n)^−nt. The difference in monthly payments between the two offers is $_________. (Round to the nearest cent as needed.)
Show Your Work Brian just purchased a home for $300,000 and made the required down payment of 20% ($60,000) to avoid PMI. Therefore, he is financing $240,000 over 30 years (360 months) at 3%. A) How much are his payments on the loan? B) His husband, Greg, is a great financial planner and says it would be very prudent to pay an EXTRA $200 per month on the mortgage payments. How many monthly payments will this “knock off” or reduce on the original 360 payments? How much interest will be saved over the life of the loan by making the extra $200 per month payment?

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