In order to buy a new car, you finance $18000 with no down payment for a term of five years at an APR of 5%. After you have the car for one year, you are in an accident. No one is injured, but the car is totaled. The insurance company says that before the accident, the value of the car had decreased by 25% over the time you owned it, and the company pays you that depreciated amount after subtracting your $500 deductible. What is your monthly payment for the loan? (Round your answer to the nearest cent.) monthly payment: S How much equity have you built up after one year? (Round your answer to the nearest cent.) equity: S

In order to buy a new car, you finance $18000 with no down payment for a term of five years at an APR of 5%. After you have the car for one year, you are in an accident. No one is injured, but the car is totaled. The insurance company says that before the accident, the value of the car had decreased by 25% over the time you owned it, and the company pays you that depreciated amount after subtracting your $500 deductible. What is your monthly payment for the loan? (Round your answer to the nearest cent.) monthly payment: S How much equity have you built up after one year? (Round your answer to the nearest cent.) equity: S

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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In order to buy a new car, you finance $20,000 with no down payment for a term of five years at an APR of 6%. After you have the car for one year, you are in an accident. No one is injured, but the car is totaled. The insurance company says that before the accident, the value of the car had decreased by 25% over the time you owned it, and the company pays you that depreciated amount after subtracting your $500 deductible.Suggestion: Use the following formula for the equity built up after k monthly payments. Equity = Amount borrowed × ((1 + r)k − 1) ((1 + r)t − 1) Can you pay off the loan using the insurance payment, or do you still need to make payments on a car you no longer have? Yes, you can pay off the loan using the insurance payment.No, you cannot pay off the loan using the insurance payment. If you still need to make payments, how much do you still owe? (Subtract the payment from the insurance company. Round your answer to the nearest cent. If you no longer…
While buying a new car, Aaron made a down payment of $800 and agreed to make month-end payments of $250 for the next 3 years and 6 months. She was charged an interest rate of 2% compounded semi-annually for the entire term. a. What was the purchase price of the car? $0.00 Round to the nearest cent b. What was the total amount of interest paid over the term? $0.00 Round to the nearest cent SAVE PR
In order to buy a new car, you finance $33,000 with no down payment for a term of five years at an APR of 6%. After you have the car for one year, you are in an accident. No one is injured, but the car is totaled. The insurance company says that before the accident, the value of the car had decreased by 25% over the time you owned it, and the company pays you that depreciated amount after subtracting your $500 deductible.How much equity have you built up after one year? Suggestion: Use the following formula for the equity built up after k monthly payments. (Round your answer to the nearest cent.) Equity = Amount borrowed × ((1 + r)k − 1) ((1 + r)t − 1) $
While buying a new car, Alexis made a down payment of $1,200 and agreed to make month-end payments of $280 for the next 4 years and 6 months. She was charged an interest rate of 4% compounded semi-annually for the entire term. a. What was the purchase price of the car? $0.00 Round to the nearest cent b. What was the total amount of interest paid over the term? $0.00 Round to the nearest cent
After Shipra got a job, the first thing she bought was a new car. She took out an amortized loan for $25,000-with no ($0) down payment. She agreed to pay off the loan by making annual payments for the next four years at the end of each year. Her bank is charging her an interest rate of 6% per year. Yesterday, she called to ask that you help her compute the annual payments necessary to repay her loan. Calculate the annual payment and complete the following loan amortization table: Year Beginning Amount 1 2 3 4 $25,000.00 Payment Interest Paid Principal Paid Ending Balance -$0.02
Mrs. Jenny bought an upper-class lot costing 1.23 Million $. The car agency asked for a downpayment of $ 320,200 and $624, 400 after one year. The remaining balance will be paid at the end of third year. If the interest rate is 13.2% compounded (a) every six months and (b) every three months, what is the required payment?
Your rental company wants to purchase a new car for its car rental business. The car costs $20,000. It will be obsolete in three years. Your options are to borrow the money at 10% or lease the car. If you lease it, the payments will be $7,500 per year, payable at the beginning of each year. If you buy the car, you can apply a CCA rate of 30% per year. The tax rate is 35%. Assume that the car has a projected salvage value of $700 and the asset pool is closed, what would be NAL. Should you buy or lease? Why?
The purchaser of a car paid $10,000 cash and agreed to pay $3000 at the end of 6 months for 10 years. He failed to make the first 5 payments of $3000 each. At the end of 3 years, he desires to pay the car by a single payment which will cancel both his accumulated liabilities and his future liabilities. What must he pay if money is worth 6% per annum compounded semi-annually?
While buying a new car, Katherine made a down payment of $1,000 and agreed to make month-end payments of $280 for the next 5 years and 6 months. She was charged an interest rate of 4% compounded semi-annually for the entire term. a. What was the purchase price of the car? Round to the nearest cent b. What was the total amount of interest paid over the term? Round to the nearest cent
While buying a new car, Thomas made a down payment of $1,000.00 and agreed to make month-end payments of $350.00 for the next 4 years and 7 months. If she was charged an interest rate of 3.00% compounded quarterly for the entire term, answer the following, rounding to the nearest cent. a. What was the cost of the car when Thomas purchased it? Round to the nearest cent b. What was the total amount of interest paid over the term?
You own a house that you rent for $1,100 per month. The maintenance expenses on the house average $200 per month. The house cost $219,000 when you purchased it 4 years ago. A recent appraisal on the house valued it at $241,000. If you sell the house you will incur $19,280 in real estate fees. The annual property taxes are $2,500. You are deciding whether to sell the house or convert it for your own use as a professional office. What value should you place on this house when analyzing the option of using it as a professional office?
While buying a new car, Monica made a down payment of $900 and agreed to make month-end payments of $240 for the next 4 years and 8 months. She was charged an interest rate of 4% compounded semi-annually for the entire term. a. What was the purchase price of the car? Round to the nearest cent b. What was the total amount of interest paid over the term? Round to the nearest cent

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