I would like to buy a Cessna Citation M2 private jet, which costs $4,700,000. I am going to get a loan to make this purchase but I won't agree to any terms that force me to spend more than $1,000,000 in interest over the life of the loan (I am simultaneously very wealthy yet also a bit of a penny pincher). I am approved for an eight year aviation finance loan at 6.4% APR, compounded monthly. I am fine with any monthly payment amount. Rounded to the nearest dollar, how large of a down payment should I make so that I can purchase this jet under acceptable terms? $1,340,283 None of these $985,284 $1,133,125

I would like to buy a Cessna Citation M2 private jet, which costs $4,700,000. I am going to get a loan to make this purchase but I won't agree to any terms that force me to spend more than $1,000,000 in interest over the life of the loan (I am simultaneously very wealthy yet also a bit of a penny pincher). I am approved for an eight year aviation finance loan at 6.4% APR, compounded monthly. I am fine with any monthly payment amount. Rounded to the nearest dollar, how large of a down payment should I make so that I can purchase this jet under acceptable terms? $1,340,283 None of these $985,284 $1,133,125

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Duke was approved for a 30 year conventional loan for $250,000 at 3.65% fixed rate. He was also approved for a 15 year conventional loan for $250,000 at 3.45% fixed rate. He has $20,000 to put as a down payment. He has to pay insurance of $1400 a year and property tax of $2500 a year. Use time value of money to figure out the best options for Duke. If he looks at a house that is $150,000 how much would he pay per month with a 15 year loan?
Dennis Lamenti wants to buy a new car that costs $15,177.57. He has two possible loans in mind. One loan is through the car dealer; it is a four-year add-on interest loan at 7 3/4% and requires a down payment of $1,000. The second is through his bank; it is a four-year simple interest amortized loan at 7 3/4% and requires a down payment of $1,000. (Round your answers to the nearest cent.) (a) Find the monthly payment for each loan. dealer ? bank ? (b) Find the total interest paid for each loan. dealer ? bank ?
Duke was approved for a 30 year conventional loan for $250,000 at 3.65% fixed rate. He was also approved for a 15 year conventional loan for $250,000 at 3.45% fixed rate. He has $20,000 to put as a down payment. He has to pay insurance of $1400 a year and property tax of $2500 a year. Use time value of money to figure out the best options for Duke. To avoid PMI (at least 20% down) what amount would Duke have to put down if he wants to take out the full amount of the loan ($250,000)?
Duke was approved for a 30 year conventional loan for $250,000 at 3.65% fixed rate. He was also approved for a 15 year conventional loan for $250,000 at 3.45% fixed rate. He has $20,000 to put as a down payment. He has to pay insurance of $1400 a year and property tax of $2500 a year. Use time value of money to figure out the best options for Duke. To avoid PMI (at least 20% down) what amount would Duke have to put down if he wants to take out the full amount of the loan ($250,000)? If he looks at a house that is $150,000 how much would he pay per month with a 15 year loan? 30 year loan? If he looks at a house that is $150,000, would a 30 year loan or a 15 year loan be the best option? He plans to make mortgage payments of no more than $700 a month (this is including escrow). What price of house can he afford? How much more principal will he have to pay per month in order to pay off his house in 7 years if he does the following: $150,000 value home, 25% down payment, 15 year…
John wants to buy a property for $121,250 and wants an 80 percent loan for $97,000. A lender indicates that a fully amortizing loan can be obtained for 30 years (360 months) at 9 percent interest; however, a loan fee of $4,800 will also be necessary for John to obtain the loan. Required: a. How much will the lender actually disburse? b. What is the APR for the borrower, assuming that the mortgage is paid off after 30 years (full term)? c. If John pays off the loan after five years, what is the effective interest rate? d. Assume the lender also imposes a prepayment penalty of 2 percent of the outstanding loan balance if the loan is repaid within eight years of closing. If John repays the loan after five years with the prepayment penalty, what is the effective interest rate
Dennis Lamenti wants to buy a new car that costs $15,326.72. He has two possible loans in mind. One loan is through the car dealer; it is a four-year add-on interest loan at 7 3 4 % and requires a down payment of $1,000. The second is through his bank; it is a four-year simple interest amortized loan at 7 3 4 % and requires a down payment of $1,000. (Round your answers to the nearest cent.) (a) Find the monthly payment for each loan. dealer $ bank $
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Asher wants to buy a car that costs $29,660. He qualifies for a 4-year loan at a 2.8% annual interest rate, and he can afford a $500 monthly payment. What minimum down payment must Asher make to keep his monthly payment at or below $500? Round your answer to the nearest dollar. $6,980 $20,325 $22,680 $9,336
John is planning to take a loan for a major renovation project for his home. He can afford only 10% of his annual gross salary for the payment of the loan. John makes $80,000 annually. The bank offered him a loan at 8% annual interest rate for 5 years to be paid monthly. Calculate the amount of the loan he should ask for: Group of answer choices $9282 ($44, 386.59) ($36, 988.83) $49,999
You are considering purchasing a lot adjacentto your laundry business to provide adequate parking space for your customers. You need to borrow$75,000 to secure the lot. You have made a deal with alocal bank to pay the loan back over a five-year periodwith the following payment terms: 14%, 20%, 26%,32%, and 38% of the initial loan at the end of first,second, third, fourth, and fifth years, respectively.(a) What rate of interest is the bank earning fromthis loan?(b) What would be the total interest paid over thefive-year period?
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $175,000. Chuck can get a secured add-on interest loan from his bank at 7.45% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,100 per month and amortize the loan in 42 months. 1) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.95% loan if Chuck can pay 20% down. What will Chuck's new monthly payment (in $) be with these conditions? (Round your answer to the nearest cent.) $ With these conditions, will Chuck be able to pay off the loan and meet his goals? Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high. 2) Attempting to reduce his monthly payment further, Chuck continues to negotiate with the seller. If the seller agrees to reduce the listed price by $4,800, finance the deal with a 6.95% loan, and if Chuck pays the 20% down, what will Chuck's monthly payment be (in $)?…
Mr. and Mrs. Johnson wants to borrow $10,000 to renovate their kitchen. Bank ABD offered them a two-year traditional loan with 4.6% interest rate. Bank CFG offered them a two-year fixed payment loan of equal installment of $5,400 per year. Which of the following statements is correct? Group of answer choices a) It is less costly for Mr. and Mrs. Johnson to borrow with the fixed payment loan. b) There isn't enough information to determine which loan is more costly. c) It is less costly for Mr. and Mrs. Johnson to borrow with the traditional loan. d) The two loans are equally costly.

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