Year 1: $500,000
Year 2: $525,000
Year 3: $550,000
Year 4: $560,000 (data continued next page)
Year 5: $575,000
Year 6 and thereafter: $580,000
Based upon you investment return requirements, should you purchase the apartment building?
Year 1: $575,000
Year 2: $600,000
Year 3: $640,000
Year 4: $650,000
Year 5: $670,000
Year 6 and thereafter: $695,000
Based upon your investment return requirements, should you purchase the apartment building (the seller has not adjusted their asking price despite the potential building moratorium)?
You:
Monthly Payments = $ 735, Tenure = 60 months, Monthly Interest Rate = 0.5416 %
Value of the Car = C1 = 735 x (1/0.005416) x [1-{1/(1.005416)^(60)}] = $ 37565.6
Sally:
Monthly Payments = $ 735, Tenure = 60 months, Monthly Interest Rate = 0.4583 %
Value of the Car = C1 = 735 x (1/0.004583) x [1-{1/(1.004583)^(60)}] = $ 38479.71
The difference in the value of the loan is owing to the difference in the FICO credit rating. A higher credit rating such as that of Sally makes the borrower more credible and safe, thereby making her loan value higher as is observable. A safer borrower (as per FICO rating) is eligible for a higher loan at a lower interest rate as such a borrower's repayment capacity is considered to be relatively stronger.
NOTE: Please raise separate queries for solutions to the remaining unrelated questions as one query is restricted to the solution of only one distinct question (with a maximum of four sub-parts).
The local BMW dealer offers to sell you the new 7 series vehicle for 60 monthly...
The local BMW dealer offers to sell you the new 7 series vehicle for 60 monthly payments of $735 (first payment 30 days from now). Given your FICO credit rating of 555 the BMW credit manager states the interest rate on this loan will be 6.5% per annum or .5416% monthly. At the time you sign the loan documents what “value” are you paying for the BMW? After purchasing the BMW, you tell Sally about the great deal you received...
The local BMW dealer offers to sell you the new 7 series vehicle for 60 monthly payments of $735 (first payment 30 days from now). Given your FICO credit rating of 555 the BMW credit manager states the interest rate on this loan will be 6.5% per annum or .5416% monthly. At the time you sign the loan documents what “value” are you paying for the BMW? After purchasing the BMW, you tell Sally about the great deal you received...
The local BMW dealer offers to sell you the new 7 series vehicle for 60 monthly payments of $735 (first payment 30 days from now). Given your FICO credit rating of 555 the BMW credit manager states the interest rate on this loan will be 6.5% per annum or .5416% monthly. At the time you sign the loan documents what “value” are you paying for the BMW? After purchasing the BMW, you tell Sally about the great deal you received...
The local BMW dealer offers to sell you the new 7 series vehicle for 60 monthly payments of $735 (first payment 30 days from now). Given your FICO credit rating of 555 the BMW credit manager states the interest rate on this loan will be 6.5% per annum or .5416% monthly. At the time you sign the loan documents what “value” are you paying for the BMW? After purchasing the BMW, you tell Sally about the great deal you received...
The local BMW dealer offers to sell you the new 7 series vehicle for 60 monthly payments of $735 (first payment 30 days from now). Given your FICO credit rating of 555 the BMW credit manager states the interest rate on this loan will be 6.5% per annum or .5416% monthly. At the time you sign the loan documents what “value” are you paying for the BMW? After purchasing the BMW, you tell Sally about the great deal you received...
The local BMW dealer offers to sell you the new 7 series vehicle for 60 monthly payments of $735 (first payment 30 days from now). Given your FICO credit rating of 555 the BMW credit manager states the interest rate on this loan will be 6.5% per annum or .5416% monthly. At the time you sign the loan documents what “value” are you paying for the BMW? After purchasing the BMW, you tell Sally about the great deal you received...
The local BMW dealer offers to sell you the new 7 series vehicle for 60 monthly payments of $735 (first payment 30 days from now). Given your FICO credit rating of 555 the BMW credit manager states the interest rate on this loan will be 6.5% per annum or .5416% monthly. At the time you sign the loan documents what “value” are you paying for the BMW?
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