You went to the car dealer to lease a car.  The car is valued at $30,000 and you can drive away without putting any money down.  The dealer offers you a 5 year lease with a $5,000 residual payment at the end if you want to buy the car.  Assuming monthly payments of $508.32, what is the implied APR?   Your answer should be close to a round number.  Use a % symbol and round to the nearest 1 decimal point.....3.0% would be the form of a correct answer.

Q: You are selling your car and the dealership says to you, "we can either give you $15,000 today or we…

A: Solution:- When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: You are considering either leasing or purchasing a car. You notice an ad that says you can lease the…

A: Lease is a contract between two parties in which one party gives right to use of asset to another…

Q: Your second financing option for the SUV is the dealership will take $500 off the original $22,510…

A: Monthly payment The minimum amount needs to be paid by the person in an account every month.

Q: You are at a dealership considering the purchase of a car that would cost $34,000 if paid for in…

A: We shall use Excel's =NPER formula to calculate the total payments that would be required under the…

Q: You want to borrow $64,000 from your local bank to buy a new sailboat. You can afford to make…

A: The amount to be borrowed is $64,000 The monthly payment that can be afforded is $1,100 The time…

Q: After deciding to acquire a new car, you can either lease the car or purchase it with a three-year…

A: Lease is a way to get the asset for a fixed time period by paying periodicals payments to other…

Q: You wish to buy a $10,000 dining room set.  The furniture store offers you a three-year loan with an…

A: Given information: Present value or principal value is $10,000 Number of years of loan is 3 Interest…

Q: Suppose that you decide to buy a car for $57,000, including taxes and license fees. You saved…

A: PMT = (P(r/n)) / (1-(1+(r/n))-nt) Where PMT = Monthly payment P = Principal Amount r = Annual rate…

Q: You are buying a new car, and you plan to finance your purchase with a loan you will repay over 48…

A: Given Information: If debt financing is opted: Amount borrowed will be $13,000 APR is 3.9% If rebate…

Q: Suppose that you decide to buy a car for $60,000, including taxes and license fees. You saved…

A: Monthly payments are the re-payments of a loan which is a combination of principal amount &…

Q: ou need a new car and the dealer has offered you a price of $20,000​, with the following payment​…

A: Option A - pay cash and receive a $2000 rebate. Cash to be paid = $20,000 - $2000 = $18,000 Option…

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

A: Please put zero for FV as it is annuity not annuity due.

Q: You want to buy a new sports coupe for $75,300, and the finance office at the dealership has quoted…

A: Loan amount (PV) = $ 75,300 Interest rate = 7.7% Monthly interest rate (r) = 7.7%/12 =…

Q: You want to borrow $65,000 from your local bank to buy a new sailboat. You can afford to make…

A: APR or Annual Percentage Rate implies for interest rate applicable on borrowed amount for each year…

Q: You want to borrow $68,000 from your local bank to buy a new sailboat. You can afford to make…

A:

Q: Suppose that you decide to buy a car for ​$61,000​, including taxes and license fees. You saved…

A: Price of car 61,000 Downpayment 11,000

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: You want to buy a Ford SUV with a list price of $48,000. Dealer A offers to sell it for a discount…

A: PMT is the periodic payment.

Q: You have decided to buy a car with price tag of $30,000 but you are able to negotiate the price down…

A: A loan is a debt amount borrowed by a deficit unit from a surplus unit. The borrower is liable to…

Q: You have to buy a new copier. The cost of the copier is $1,900, plus $415 per year in maintenance…

A: Payments: Year Cost 0 1900 1 415 2 415 3 415 4 415 5 415 Discount Rate = 6.5%…

Q: Suppose that you decide to buy a car for $65,000​, including taxes and license fees. You saved…

A: Incentive A involves $7,000 off the price of the car, therefore the cost of the car will be…

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: Suppose you want to buy a $153,000 home. You found a bank that offers a 30-year loan at 4.5% APR.…

A: Price of Home (PV) is $153,000 APR (r) is 4.5% Time Period (n) is 30 years and 25 years Compounding…

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 are interested in leasing a car for $425 per month, due at the beginning of each month. Using an…

A: The present value of the annuity is the current worth of a cash flow series at a certain rate of…

Q: A computer dealer offers (a) to lease a system to you for $50 per month for two years. At the end of…

A: Basic Details: Interest = 12% Number of Months = n =  24 Months Option A: Lease Amount Per Month =…

Q: You want to but a $27,000 car. The company is offering a 3% interest rate for 60 months (5years).…

A: You want to but a $27,000 car. The company is offering a 3% interest rate for 60 months (5years).…

Q: Suppose you want to buy a $141,000 home. You found a bank that offers a 30-year loan at 3.7% APR.…

A: Given Information:Amount is $141,000 Number of years is 30 APR is 3.7%

Q: Assume that you wish to trade in your old car and buy a new car. The new car has a list price of…

A: =$12235.13

Q: You want to buy a new sports coupe for $74,100, and the finance office at the dealership has quoted…

A:

Q: You want to buy a car with a local bank that will lend you $20000. The loan will fully amortized…

A: The amortized loan is a loan that repays with regular installments. The monthly payments of a loan…

Q: leasing a car for 48 months where the advertisement says that monthly payments are $399 with $5,000…

A: Lease payment must be according to the minimum interest rate that must be satisfied  given present…

Q: A. If i buy a car from a dealership for $27000 with 2.5% paying monthly for a total of 3 years how…

A: Future value :— It is the value of present money in the future date.    Future value = Present Value…

Q: Suppose you want to become a Lyft driver and need to lease a car.  You want a car valued at $22,000.…

A: Value of car =  $22,000 Residual Amount to be paid = $ 5255.19 Amount for the purpose of Monthly…

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: 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: You need a new car and the dealer has offered you a price of $20,000​, with the following payment​…

A: The net present value is a method of discounting cash flows and adding them to find the value of the…

Q: If you make monthly payments for 4 years, what is the total amount of interest that you'll end up…

A: Loan (mortgage) amortization schedule refers to a schedule which is prepared to shows the periodic…

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

A: The question is related to present value annuity and, as per present value annuity formula we…

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 you obtain a five-year lease for a Porsche and negotiate a selling price of $157,000. the…

A: In this question we need to compute: A) the net capitalized cost B) the money factor C) the average…

Q: You want to buy a new sports coupe for $74,700 , and the finance office at the dealership has quoted…

A: The monthly payments is calculated by using fallowing formula       Present value P = Present value…

Q: Suppose you are in the market for a new car worth $18,000. You are offered a deal to make a $1,800…

A: Loan amortization schedule refers to the presentation of complete loan payments over the period of…

Q: Suppose that you decide to purchase a new car. You go to a credit union to get preapproval for your…

A: According to the time value of money concept, the value of the amount of money in the future is less…

Q: You are in the process of getting a new car but are not sure if you should buy or lease. The total…

A: A lease refers to a contract where one party gives another party the right to use property or…

Q: You want to buy a new sports coupe for $78,500, and the finance office at the dealership has quoted…

A: Loan amount = $78,500  Annual percentage rate (APR) = 6% Effective annual rate (EAR) is the…

Q: You want to buy a car, and the local bank will lend you $20,000. The loan will be fully amortized…

A: Present value (PV) refers to the present value of a future sum of money or some sort…

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.