Suppose that you decide to buy a car for $57,000, including taxes and license down payment. The dealer is offering you a choice between two incentives. Incentive A is $6000 off the price of the car, followed by a five-year loan at 7.03%. Incentive B does not have a cash rebate, but provides free financing (no interest) over five years. What is the difference in monthly payments between the two offers? Which incentive is the better deal? Use PA [-] PMT= The difference in monthly payments between the two offers is (Round to the nearest cent as needed.)

Suppose that you decide to buy a car for $57,000, including taxes and license down payment. The dealer is offering you a choice between two incentives. Incentive A is $6000 off the price of the car, followed by a five-year loan at 7.03%. Incentive B does not have a cash rebate, but provides free financing (no interest) over five years. What is the difference in monthly payments between the two offers? Which incentive is the better deal? Use PA [-] PMT= The difference in monthly payments between the two offers is (Round to the nearest cent as needed.)

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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Similar questions

You plan to buy a new car. The car dealer offers the following two options: Option A: Pay $12,000 each year for 3 years Option B: Pay $1,000 each month for 3 years Your friend recommends option A. Do you agree? (ps: this is the full question that without interest rate numbers; plz use present value method thx)
You have been given a choice of paying $20,000 for a new GM car with a $3,000 cash rebate (net cost of $17,000 which you finance separately), or zero percent financing for 48 months with no cash rebate. What is the implicit rate of interest in this deal?
Suppose you would like to purchase a new mustang GT. The sticker price of the mustang you want is $40000. The dealer is able to give you an APR of 4% for 5 years. How much will your monthly payments be?How much will you have paid in interest once the loan is paid off?
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.
21. You can buy a car advertised for $12,000 on the following terms: (a) pay $12,000 and receive a $1,000 rebate from the manufacturer, or (b) pay $250 a month for 4 years, for total payments of $12,000, implying 0% financing. Which is a better deal if the interest rate is 1% per month?
← You need a loan of $150,000 to buy a home. Calculate your monthly payments and total closing costs for each choice below. Briefly discuss how you would decide between the two choices. Choice 1: 20-year fixed rate at 6% with closing costs of $2900 and no points. Choice 2: 20-year fixed rate at 5.5% with closing costs of $2900 and 4 points. What is the monthly payment for choice 1? A (Do not round until the final answer. Then round to the nearest cent as needed.)
Suppose you purchase an automobile for a selling price of $1,600,000. You make a down payment of 5% of the selling price and finance the remaining balance for 4 years at an annual interest rate of 5%. The sales tax is 7.5% of the selling price, and the license fee is 0.8% of the selling price. Find the monthly payment.
On excel You plan on purchasing a car for $28,500. The car dealer tells you that if you finance it through them at a nominal interest rate of 6%, they will give you $1500 cash back (so, your actual loan is only for $27,000). You know you can get a full-priced loan at the local credit union at a nominal interest rate of 2.9%. Both loans will have monthly payments and will be 4 yrs in length. a. Compute the month rate for each loan b. Compute the amount of interest you pay for each loan
You were able to sell a car worth 2,100,000, which would be financed by a bank. You told your buyer that the required down payment was 20% of the net price. Your buyer also need to pay the monthly amortization of 34,950 for 5 years. 1.How much was the interest rate charged by the bank for requiring the buyer to pay the monthly amortization of 34,950 for 5 years? 2.How much was your total commission if you received a commision of 5.25% based on the suggested retail price of the car from the car dealer and 1.25% incentive from the bank.
You agree to purchase a car with a competitive value of $44,500 for the following loan contract: Purchase the car for $44,250 with $2,000 down and borrow the remainder over 5 years with monthly payments based on a rate of interest of 6.6%. Your market rate of return is 5.25%. How much value did you destroy with this purchase? (Round to dollars and cents; round the car payment to dollars and cents.)
Explain well with proper answer.
Which is a better choice in buying a computer worth $12,700.00? Choose from the following options: 1. Borrow from a lending firm offering 12% compounded quarterly payable in 1 year and 6 months2. Avail of the instalment plan which requires payment of $850.00 a month for 18 months3. Borrow from a lending firm offering 12% compounded monthly payable in 1 year and 6 months4. Borrow from a lending company that charges 12 1/4% simple interest payable in 1 year and 6 months

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