You are looking to buy a car. You can afford $550 in monthly payments for four...

Question

Question

Answer 1

Answer #1

Following formula used for calculation

r= rate of interest = 9.5%/12 (monthly payment)

PMT= 550

Down payment= 2000

N= number of years = 4× 12

Present value = PMT x ((1 - (1 / (1 + r) ^ n)) / r)

Present value= 550 ((1- (1/(1+0.095/12) ^4×12))/0.095/12)

Present value= 21892.17

Adding down payment total amount is 21892.17+ 2000= 23892.17

Answer 2

Similar Homework Help Questions

You are looking to buy a car. You can afford $730 in monthly payments for five...

You are looking to buy a car. You can afford $730 in monthly payments for five years. In addition to the loan, you can make a $830 down payment. If interest rates are 10.00 percent APR, what price of car can you afford (loan plus down payment)? (Do not round Intermediate calculations and round your final answer to 2 decimal places.) Present value To borrow $3,700, you are offered an add-on interest loan at 9.3 percent with 12 monthly payments....
You are looking to buy a car. You can afford $520 in monthly payments for four...

You are looking to buy a car. You can afford $520 in monthly payments for four years. In addition to the loan, you can make a $1,700 down payment. If interest rates are 8.75 percent APR, what price of car can you afford (loan plus down payment)?
Problem 5-25 Present Value (LG5-4) You are looking to buy a car. You can afford $390...

Problem 5-25 Present Value (LG5-4) You are looking to buy a car. You can afford $390 in monthly payments for four years. In addition to the loan, you can make a $1,600 down payment. If interest rates are 8.50 percent APR, what price of car can you afford (loan plus down payment)? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value

Problem 4-35 Solving for Rates (LG4-7) 25 You invested $2,000 in the stock market one year...

Problem 4-35 Solving for Rates (LG4-7) 25 You invested $2,000 in the stock market one year ago. Today, the investment is valued at $1700 points What return did you earn? (Negative answer should be indicated by a minus sign) Bock Retur eamed Berences What return would you need to get next year to break even overall? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Retum eamed LMR my Problem 4-32 Solving for Time (LG4-8) 2.5 points...
You are looking to buy a car and can afford to pay $195 per month. If...

You are looking to buy a car and can afford to pay $195 per month. If the interest rate on a car loan is 0.78% per month for a 60-month loan, what is the most expensive car you can afford to buy? The amount that you can afford is (Round to the nearest dollar.)
You are looking to buy a car and can afford to pay $195 per month. If...

You are looking to buy a car and can afford to pay $195 per month. If the interest rate on a car loan is 0.78% per month for a 60-month loan, what is the most expensive car you can afford to buy? The amount that you can afford is $. (Round to the nearest dollar.)

willie can afford monthly car payments of $200 for four years. what is the most expensive...

willie can afford monthly car payments of $200 for four years. what is the most expensive car willie can buy, if the corresponding loan has an 18% annual rate?
You take out an $8,600 car loan that calls for 48 monthly payments starting after 1...

You take out an $8,600 car loan that calls for 48 monthly payments starting after 1 month at an APR of 6%. a. What is your monthly payment? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the effective annual interest rate on the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. Now assume the payments are made in four annual year-end installments. What...
14 Problem 5-39 Loan Payments (LG5-9) You wish to buy a $23,500 car. The dealer offers...

14 Problem 5-39 Loan Payments (LG5-9) You wish to buy a $23,500 car. The dealer offers you a 5-year loan with a 9 percent APR. What are the monthly payments (Do not round intermediate calculations and round your final answer to 2 decimal places.) -Book Payment per month Hint erences How would the payment differ if you paid interest only? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Payment per month

You have an outstanding student loan with required payments of $550 per month for the next...

You have an outstanding student loan with required payments of $550 per month for the next four years. The interest rate on the loan is 10% APR (compounded monthly). Now that you realize your best investment is to prepay your student loan, you decide to prepay as much as you can each month. Looking at your budget, you can afford to pay an extra $250 a month in addition to your required monthly payments of $550, or $800 in total...