12. Marlon can purchase a company car for his real estate business for $30 000. Interest lost on the money used for the purchase is estimated at 6% per year, compounded quarterly. Alternatively, Marlon can lease the car for $4000 per year. a) Calculate the cost of keeping the car for five years, and then selling it for $12 000. Include the cost of lost interest on the money used for the purchase. b) Calculate the cost of leasing the car for five years. c) Which plan is a better deal for Marlon? How much more would he pay with the other plan?
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- b) You have decided to buy an apartment costing $140,000. At present you have $10,000 to be paid as down payment and your bank CAB agrees to provide you with the remaining amount of money. The interest rate is 12% to be repaid in 5 years period. Find the annual payment to be amortized and also prepare a schedule of amortization.D4) Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows: Year NOI 1 $100,000 2 $105,000 3 $110,000 Bob will own the property for two years. Bob will sell the property at the end of year 2 at a cap rate that is 250 basis points lower than the cap rate at which he bought the property. What is Bob’s annualized IRR for the investment in question A. 26.21% B. 14.89% C. 30.47% D. 27.78%III. Assume compound interest is used to solve the following problems. 1. Stanley borrowed $4500.00 from his credit union to do some home renovations. The loan has an annual interest rate of 5.75% and an amortization period of 3 years. a. What is Stanley's monthly payment? b. Calculate the total amount he will pay over 3 years. G Calculate the finance charge on the loan. 2. Adele wants to buy a used car that costs $2900.00. She has $1100.00 saved up for a down payment. a. How much will Adele have to borrow to buy the car? b. She can get a loan at 6.50% per annum with an amortization period of 2 years. What will be her monthly payment? c. What will be the total she pays for the loan? d. How much will the car cost? 3. Calculate the monthly payment, the total amount paid, and the finance charge for the following loans: a $2000.00 at 8.00% per annum for 3 years; b. $10 000.00 at 6.25% per annum for 5 years; and c. $1500.00 at 3.75% per annum for 2 years. 4. Harley used her credit card to…
- You are trying to evaluate the feasibility of purchasing a land. You plan to rent the plot of land to receive after-tax receipts of $2,500 per month. You are hoping to sell the land in the next ten years to receive after-tax proceeds of US$2.0 million to purchase a building containing at least four apartments. Assume the funds for purchasing the apartment will be drawn from your savings account which is currently earning 2% after taxes and that inflation rate is currently 5%. a) Identify the cash flows, their timing and the required rate of return applicable to calculating the maximum value you should pay for the land. b) Showing all calculations state if you should purchase the land for $1.6 million, justify your decision. What is the maximum price you should pay to acquire the single dwelling unit?There is a $700,000 foreclosed home for sale in your neighborhood. You have been pre-qualified for a one-year loan at 4% interest to cover the full purchase price and anticipate it will take $50,000 to pay off an existing lien. You also know that you will need to invest $5,000 a month in the house for repairs. You know enough about the market to ascertain that this property will sell for $825,000 in one year. If you want a 15% return on your investment, should you make the purchase?Jeff decides to lease a $35,000 vehicle for 4 years. It is estimated that the car will be sold at a price of $17,955. If the annual interest is 3%, what is the financing fee? $44.89 O $87.50 $66.19 O $151.30
- Suppose that a certain car has the following average operating and ownership costs. Average Costs per Mile Operating $0.24 a. If you drive 20,000 miles per year, what is total annual expense for this car? Ownership $0.68 Total $0.92 b. If the total annual expense for this car is deposited at the end of each year into an IRA paying 8.5% compounded yearly, how much will be saved at the end of nine nt - 1 years? Use the formula A = a. If you drive 20,000 miles per year, the total annual expense for this car is $ (Round to the nearest dollar as needed.)A new automobile offers free maintenance during the first year of ownership. The maintenance costs the second year will be $100, increasing by $100 each year thereafter. Assume that you will own the automobile for 5 years and that your cost of money is 8%. Find the future worth of the maintenance costs.The price of a new car is $24,000. 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 14%/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 24 mo? Over a period of 48 mo? 24 mo $ 48 mo $ (b) What will the interest charges be if she elects the 24-mo plan? The 48-mo plan? 24 mo $ 48 mo $
- 1) USE THE AMORTIZATION TABLE TO ANSWER THIS QUESTION: Bob Jones bought a new log cabin for $ 325,000, at 8% interest for 30 years. He had to pay 20% down to obtain the loan. Required: From the amortization table: How much of the monthly payment is applied to interest in the first month? 2) USE THE AMORTIZATION TABLE TO ANSWER THIS QUESTION: Bob Jones bought a new log cabin for $ 325,000, at 8% interest for 30 years. He had to pay 20% down to obtain the loan. Required: From the amortization table: How much of the monthly payment is applied to principle in the second month?The price of a new car is $36,000, 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 7%/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 24 months? Over a period of 48 months? 24 months $ 48 months (b) What will the interest charges be if she elects the 24-month plan? The 48-month plan? 24-month plan 48-month planAfter 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…