You buy a car for $18,450. You must also pay tax and license fees of $725. You have $1,500 as a down payment. Your bank will make you a 4-year car loan for the remaining amount, at 7.2% interest, but will charge you a $75 processing fee (which will be added to your loan amount).
a.) What are your monthly payments?
b.) What is your finance charge?
c.) What is the total cost of the car, including finance charges?
d.) What is the APR?
a) Total cost of the car including tax,licence fee and loan processing fee= 18,450+725+75=$19,275
down payment= $1500
remaining amount=19275-1500=$17,775
interest rate=7.2%
time=4 years
let the monthly payment=x
monthly interest rate=7.2/12=0.6%
17,775= x/(1+0.0006)+..................+ x/(1+0.006)48
=> x(monthly payment)=$427.3
b) finance charge = interest accured
total payment in 48 months=427.3*48=$20,510.4
interest accured= 20,510.4-17775=$2735.4
c)Total cost of car= downpayment + sum of monthly payment= 1500+20,510=$22,010.4
d) APR (annualized percentage rate)= (1+ monthly rate)12-1= 7.224%
You buy a car for $18,450. You must also pay tax and license fees of $725....
Suppose that you decide to buy a car for $63,000, including taxes and license fees. You saved $ 13,000 for a down payment. The dealer is offering you a choice between two incentives. Incentive A is $7000 off the price of the car, followed by a five-year loan at 7.69%. Incentive B does not have a cash rebate, but provides free financing (no interest) over five years.
Problem 2-Buying a Car You see a car that you absolutely must have. The price tag says $18,450, but you want to keep your payment low over a 4-year period. Since you want to make payments no larger than $250 at the end of every month, you must find a bank to finance a loan for you. The bank you find charges interest at a rate of 6.99% compounded monthly. Use this information to find the following: The amount you...
You need a new car. You can either lease or buy the car for 365 000 SEK. In both cases you expect to use the car for 5 years. It will have a residual value of 120 000 SEK after 5 years. You can borrow at a rate of 3.5% APR with monthly compounding. (a) In case you buy the car you will take an annuity loan over 5 year at a borrowing rate of ${col}%. What will be your...
You need a new car. You can either lease or buy the car for 365 000 SEK. In both cases you expect to use the car for 5 years. It will have a residual value of 120 000 SEK after 5 years. You can borrow at a rate of 3.5% APR with monthly compounding. (a) In case you buy the car you will take an annuity loan over 5 year at a borrowing rate of ${col}%. What will be your...
You want to buy a new car for € 21141. You will be able to finance this with 12% APR loan for 48 months. What will your monthly payments be?
You want to buy a new car for € 16667. You will be able to finance this with 12% APR loan for 48 months. What will your monthly payments be?
Amortization Table. You wish to buy a $40,000 car. The bank can finance you with a 3-year loan at a 4 percent APR. If you make a $7,000 down payment on the purchase. What are the monthly payments on your loan? How much will you pay in interest each year? Show the amortization table (use monthly payments).
You want to buy a new car for $74,300, and the finance office at the dealership has quoted you a loan with an APR of 6.7% for 72 months to buy the car. What will your monthly payment be? What is the effective annual rate on this loan? Please show all answers and calculations.
Find the monthly payment on a car that you intend to buy. Use the following inputs: · Price of the car is 180,000 AED. · The bank will finance only 75% of the car price. · The interest rate is 3% and the loan term is 5-year. What is the down payment? What is the monthly payment? The bank officer told you that they have a special option for Ajman University Students. The offer is as follows: · The bank...