The price of a car you want is $42,000 today. Its price is expected to increase by $1000 each year. You now have $25,000 in an investment account, which is earning 10% per year. How many years will it be before you have enough to buy the car without borrowing any money? Solve by (a) trial and error, and (b) by spreadsheet.

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A: To calculate the selling price after 1 year we will use the time value of money formula as follows:…

Q: 5. Suppose you need $10,000 in one year for the down payment on a new car. If you can earn 7%…

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A: Actual ROR "rate of Return" The gain or loss relative to the cost of an initial investment, usually…

Q: You are preparing to produce some goods for sale. You will sell them in one year and you will incur…

A: Net present value is difference between cash flow and initial cost.

Q: Mr. Rambo wants to save for a new pickup that he expects will cost 1,900,000 four and one-half years…

A: Cost = 1,900,000 four and half years from now N = 4 Interest Rate = 6.25%

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A: Here, Required Amount (FV) is $4,500 Current Amount in Account (PV) is $4,000 Interest Rate is 8%

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A: The Net Present value is an important technique of capital budgeting. It considers the time value of…

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A: To Find: NPV  IRR

Q: What is the annual operation and maintenance costs of owning this vehicle?

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A: (a) Number of years required to break even:

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A: Here, Interest Rate is 10% Savings per year is $21,300

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A: Deposit per year at Beginning of year (P)=9000 Market ínterest rate (I)= 13% Number of deposit (n)=…

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A: To solve the question, we first need to determine the amount for which the monthly payments has to…

Q: As part of your financial planning, you wish to purchase a new car exactly 5 years from today. The…

A: Present value of the car = $20,000 When the inflation rate is 2% Future value of the car = Present…

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Q: Your friend in mechanical engineering has invented a money machine. The main drawback of the machine…

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Q: What rate of return would be needed for that prediction to come true?

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Q: 3. An investment pays $7,000 per year forever, with the first payment occurring 15 years from now.…

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Q: Today, your dream car costs $54,500. You feel that the price of the car will increase at an annual…

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A: The computation is done below: The amount available will be $26,751.81

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A: Rate of return: It is the percentage of return generated from an investment.

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Q: You found the perfect car but costs $30,000. How much is your monthly payments if your bank charges…

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Q: How much do you have to invest today to have $25,000 for the purchase of a car four years from now…

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Q: will it cost at that time.

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A:

Q: Suppose that a certain car has the following average operating and ownership costs. Average Costs…

A: IRA or Individual Retirement Account is facility offered by banks and financial institution which…