Interest on Credit Cards. Eileen, who is currently paying $1,210 per year in finance charges to her credit card company, wants a car that costs $7,000. How long wou Eileen to save for the outright purchase of the car if she did not have any credit card debt and used the interest payments to save for the purchase of the car? Eileen can account paying 4% interest To save for the outright purchase of the car, it would take Eileen years. (Use your financial calculator and round to two decimal places)

Interest on Credit Cards. Eileen, who is currently paying $1,210 per year in finance charges to her credit card company, wants a car that costs $7,000. How long wou Eileen to save for the outright purchase of the car if she did not have any credit card debt and used the interest payments to save for the purchase of the car? Eileen can account paying 4% interest To save for the outright purchase of the car, it would take Eileen years. (Use your financial calculator and round to two decimal places)

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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Nicole is taking out an amortized loan for $33,000 to buy a new car and is deciding between the offers from two lenders. She wants to know which one would be the better deal over the life of the car loan, and by how much. (a) A bank has offered her a 5-year car loan at an annual interest rate of 6.5%. Find the monthly payment. (b) Her credit union has offered her a 7-year car loan at an annual interest rate of 6.5%. Find the monthly payment. (c) Suppose Nicole pays the monthly payment each month for the full term. Which lender's car loan would have the lowest total amount to pay off, and by how much? • Bank The total amount paid would be $ ____ less than to the credit union. • Credit union The total amount paid would be $ ____ less than to the bank.
Theo just financed a new car through his credit union. His car loan requires payments of $420 a month for five years. Assuming that all payments are paid timely, his last payment will pay off the car loan in full. Theo has a(n): Group of answer choices interest-only loan. amortized loan. pure discount loan. perpetuity loan. lump sum loan.
Tori is planning to buy a car. The maximum payment she can make is $3400 per year, and she can get a car loan at her credit union for 7.3% interest. Assume her payments will be made at the end of each year 1–4. If Tori’s old car can be traded in for $3325, which is her down payment, what is the most expensive car she can purchase?
Suppose that you need $30,000 for your last year of college. You could go to a private lending institution and apply for a signature student loan; rates range from 7% to 14%. However, your Aunt Sally is willing to loan you the money from her retirement savings, with no repayment until after graduation. All she asks is that in the meantime you pay her each month the amount of interest that she would otherwise get on her savings (since she needs that to live on), which is 4%.What is your monthly payment to her, and how much interest will you pay her over the year (9 months)?(Fill in the blanks below and give your answers as whole numbers.)The amount of interest per month you would pay Aunt Sally is $__(1)__ .The total interest you will pay her over the year (9 months)is $__(2)__ .
After visiting several automobile dealerships, Richard selects the car he wants. He likes its $10,500 price, but financing through the dealer is no bargain. He has $2,100 cash for a down payment, so he needs an $8,400 loan. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $8,400 for a period of two years at an add-on interest rate of 10 percent. a) What is the total interest on Richard’s loan? b) What is the total cost of the car? c) What is the monthly payment? d) What is the annual percentage rate (APR)?
Kayla Gordan plans to borrow $300,000 from ANZ bank to set up a Nail Salon.She currently has $10,000 in savings and she will use her house as security for the loan.Which of the following best represents a risk associated with this financing method? A.Kayla's proportion of business ownership will be diluted B.Interest payments are tax deductible C.Bank will repossess her house if she defaults on the loan D.Kayla is required to pay dividends to the bank
After visiting several automobile dealerships, Richard selects the car he wants. He likes its $15,000 price, but financing through the dealer is no bargain. He has $3,000 cash for a down payment, so he needs a loan of $12,000. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $12,000 for a period of four years at an add-on interest rate of 14 percent. a. What is the total interest on Richard's loan? Total interest b. What is the total cost of the car? Total cost c. What is the monthly payment? Monthly payment d. What is the annual percentage rate (APR)? (Enter your answer as a percent rounded to 2 decimal places.) APR %
1. Danielle wants to buy a car. She can only afford a $350 car payment. She is given a financing option from Money Financial, Inc. which will allow him to repay the loan over 4 years. The interest rate is 4.25%. Can Danielle purchase the car if the financing amount is $16,000? If not, how much can she afford to finance? DOUBLE CHECK 20,3902. Dr. Pickens wants to buy a burger chain. He currently has $35,000. He needs to have $80,000 in 5 years. He can earn 12% compounded annually. If he saves money at the beginning of the year, how much must he save per year to meet his goal? DOUBLE CHECK 45,3943. SARDY Corporation’s stock is currently valued at $50 per share. You own 2 shares of the stock. It is expected to grow by 5% per year for the next 5 years. How much will SARDY Corporation be worth in 8 years?4. Donald Draper has no money after getting canned (fired) from his job as an advertising agent. He wants to have $5,000,000 in 30 years. How much would he need to steal and invest today…
Rayleene is getting a loan to buy a used car from a seller. The price of the car is $8200.00. She has a down payment of $500.00 and is able to negotiate an interest rate of 5% from her bank. Rayleene is trying to decide whether to get her loan for 3 or 4 years. What is the Amount of Principal.What is the Monthly Payment for a 3 year loan & a 4 year loan.What are the Total Payments.What is the Total Cost of the Loan.Should Rayleene take her car loan out for 3 or 4 years? Why?Gary is buying a used car from a dealership for $15,499.00 so he needs to pay both GST and PST. His down payment is $3000.00, and he is approved for a 4.75% loan.What is the GST.What is the PST.What is the Amount of Principal.What is the Monthly Payment for a 3 year loan & a 5 year loan.What are the Total Payments.What is the Total Cost of the Loan.Should Gary take his car loan out for 3 or 5 years? Why?
After visiting several automobile dealerships, Richard selects the used car he wants. He likes its $10,000 price, but financing through the dealer is no bargain. He has $1,500 cash for a down payment, so he needs an $8,500 loan. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $8,500 for a period of four years at an add-on interest rate of 10 percent. (a) What is the total interest on Richard's loan? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Total interest (b) What is the total cost of the car? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Total cost (c) What is the monthly payment? (Do not round intermediate calculations. Round your answer to the nearest whole…
Lashonda is taking out an amortized loan for $29,000 to buy a new car and is deciding between the offers from two lenders.She wants to know which one would be the better deal over the life of the car loan, and by how much.Answer each part. Do not round intermediate computations, and round your answers to the nearest cent.If necessary, refer to the list of financial formulas . (a) Her credit union has offered her a 7 -year car loan at an annual interest rate of 6.4% . Find the monthly payment. $ (b) A bank has offered her a 5 -year car loan at an annual interest rate of 6.4% . Find the monthly payment. $ (c) Suppose Lashonda pays the monthly payment each month for the full term. Which lender's car loan would have the lowest total amount to pay off, and by how much? Credit union The total amount paid would be$less than to the bank. Bank The total amount paid would be$less than to the credit union.
To be able to take her dream vacation, Maya decides to save for 4 years. She opens a savings account with $500. The account pays simple interest at an annual rate of 4%. She doesn't make any more deposits. Answer the following questions. If necessary, refer to the list of financial formulas. (a) How much total interest will Maya earn? (b) What will the total amount in the account be (including interest)?

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