The formula below finds the monthly payment for a loan (car, mortgage, student): P=I (r/1-(1+r)-n )  7. If you want to buy a car that costs $16,000 with a loan at 3% APR how many years should you finance the car if you want your payment to be below $230? Do this problem any way you want, but clearly communicate your thinking.

Q: Suppose you are planning to buy a car and just found one that is selling for $5,700. You have $1,000…

A: Equated monthly payment is a fixed payment given by the borrower of the loan to the lender on a…

Q: Suppose that you decide to borrow 16000 for a new car. You can select one of the following loans…

A: Loan A has a term of 3 years with 6.3% interest.The formula to calculate monthly payment is given…

Q: You can afford a $500.00 per month car payment. You can get a loan at 8% interest for 4 years. A.…

A: Loan: When money is lent to another party in return for regular repayment of the loan principal…

Q: For the car loan described, give the following information. A car dealer will sell you the $30,750…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: You purchase a basic package, 4-door sedan for your company's fleet for $18,000. The 3 year loan has…

A: Assumption: It is assumed the given situation is in monthly compounding. The question gives the…

Q: You want to buy a new sports coupe for $74400 and the finance office at the dealership has quoted…

A: given, p=$74400 r=6.8% m=12 n=4 years (4812)

Q: suppose that you decide to borrow $15,000 for a new car. you can select one of the following loans,…

A: a.Loan ALoan Amount (pv) = $15,000Interest Rate (rate) = 5.9%Time Period = 3 YearsNumber of Payments…

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: You decide that you can spend 600 as a monthly payment for a new car. Your bank offers car loans at…

A: The amount that can be borrowed should equal the present value of future payments. This is based on…

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: there is a house on sale for $800,000. You believe you can finance the home for $500,000 for 20…

A: In this we have to calculate present value FACTOR monthly and calculate the monthly payment.

Q: We really want a new car and want to know if we can realistically afford it but also see how much…

A: Monthly payment is calculated by pmt formula in excel.

Q: Suppose you have graduated from college and want to purchase a house. Your take-home pay is $4560…

A: To Find: Total Cost of House for 15-year mortgage. Maximum i can afford with a 30 -year mortgage.

Q: You need to purchase a car, but don’t have the money to buy it outright. Therefore, you’ll have to…

A: Cost of car=$11999 Down payment =5500 monthly payment =250 interest rate =7%

Q: ave selected a new car to purchase for $19,500. If the car can be financed over a period of 4 years…

A: The given problem can be solved using PMT function in excel. PMT function computes instalment amount…

Q: You got a very high paying job at career fair and plan on buying a very nice home in your new city.…

A: Loan is a value which is borrowed from the external sources like banks for a certain period and this…

Q: You decide that you need $47,000 in 3 years to make a down payment on a house. You plan to make…

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

Q: You want to buy a new sports coupe for $84,500, and the finance office at the dealership has quoted…

A: APR refers to annual percentage rate. An APR is the annual rate that is charged for borrowing or can…

Q: (a) A savings and loan association has offered him a 6-year car loan at an annual interest rate of…

A: Loan Payments: These payments consist of both interest and principal payments. These payments are…

Q: The scenario is designed to help you determine and evaluate the payment amount of a car loan and a…

A: Given in this question, Monthly income = $3,000 Maximum car payment each month = 10% of the monthly…

Q: Suppose that you decide to borrow $13,000 for a new car. You can select one of the following loans,…

A: Amont to be borrowed(P) is $13,000 Loan A is 3 year loan with Interest rate of 6.3% Loan B is 5 year…

Q: If you take out a loan for a new $20,000 car, a typical APR with a fair credit score is 4.8%. If you…

A: Solution:- We know,  Equal monthly installment =  { Loan amount x r x [ (1+r)n / (1+r)n -1] where r…

Q: If a dealer offers you a car at $275 monthly payment for 5 years plus $5,000 down. If you can get a…

A: Loan is an agreement between lender and borrower. Lender agrees to provide funds t borrower at…

Q: Someone buys a car for 12,000$ and puts 25% down. They then get a simple interest amortized loan for…

A: APR: Annual percentage rate includes fees and additional costs related to the loan processing. It is…

Q: Suppose that you decide to buy a car for $28,635, including taxes taxes and license fees. You saved…

A: Car cost=28635 Saved =7000 period (4*12) = 48 interest (6.87%/12) = 0.57%                 G H…

Q: You want to buy a car and therefore you need $10,000. You can borrow from a bank today for 6 years.…

A: Purchase Price of Car = 10,000 Time Period (N) = 6 years i.e. 72 months Down Payment = 10% Loan =…

Q: You want to buy a car. The loan amount will be $28,000.00. A bank is offering a 5% interest rate for…

A: Present Value Method :— It is method for calculating present Value of All periodical future cash…

Q: You want to buy a new sports coupe for $75,100, and the finance office at the dealership has quoted…

A: Loan Amount is $75,100 APR is 7.5% Total Number of months is 72  Monthly rate is 7.5%12=0.625% To…

Q: 1. What is your monthly payment if you choose 0% financing for 48 months? Round to the nearest…

A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount…

Q: The scenario is designed to help you determine and evaluate the payment amount of a car loan and a…

A: Household income = $36,000 per year or Monthly Income = $3,000

Q: If a dealer offers you a car at $275 monthly payment for 5 years plus $5,000 down. If you can get a…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Jake has approached you for a loan and based on your assessment, his cash-flow will accommodate a…

A: Loan is repaid in 5 years, on monthly basis. No. of repayments = 5yrs*12 = 60 Total Repayment = No.…

Q: with formulas please!!! Thank you so much!!! You want to purchase a new car by taking out a 3 year…

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Q: Using a TMV solver You would be borrowing $350,000 for a home loan at 3% interest, but you are…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Suppose that you borrow $10,000 for four years at 8% toward the purchase of a car. Use PMT to find…

A: given, p = 10000 n = 12 r =8% t= 4 pmt=p×rn1-1+rn-nt=10000×8%121-1+8%12-12×4=$244.14 MONTHLY PAYMENT…

Q: You are interested in buying a brand new jalopy and expect the purchase price to be $19,000. The car…

A: Purchase Price = $19,000Down Payment = $1,000 Calculation of Loan Amount (PV):

Q: Suppose that you decide to borrow $15,000 for a new car. You can select one of the following loans,…

A: For calculating the monthly payment of A , following details will be used Principal Amount = $15,000…

Q: Suppose that you decide to borrow 13000 for a new car. You can select one of the following loans…

A: With the given information, we need to find the monthly payments and total interest for each of the…

Q: P Suppose that you borrow $14,000 for four years at 5% toward the purchase of a car. Use PMT = to…

A: PMT = P * (r/n) / 1-[(1+r/n)]^-nt where, P = amount borrowed i.e. $14000 r = rate of interest i.e.…

Q: You borrow $22541 to buy a car. You will have to repay this loan by making equal monthly payments…

A: In order to calculate the monthly payment on the financial calculator, firstly we are required to…

Q: You would like to get a loan for a new car and you have been approved for the loan at 4.5%…

A: Loan Rate = 4.5% Biweekly payments = $275 Time period = 2 years  Biweekly means 2 times a week…

Q: You plan on purchasing a car for $28,500. The car dealer tells you that if you finance it through…

A: Here,

Q: Pick a car that you would like to purchase one day. а. How much does the car cost? b. You plan to…

A: The loan along with other details on monthly payment have been solved below.

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: To purchase a new car, you borrow $20,000. The bank offers a 6-year loan at an interest rate of…

A: Answer-  Option(C) SPCAF- Single payment compound amount factor. It means payment is done at one go…

Q: (a) You want to buy a car, and a local bank will lend you $40,000. The loan will be fully amortized…

A: Given  Total loan amount is $40,000 The rate is 5%

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.