7. Mark Hohman has decided that it is time to buy a new car. He has found his dream car for $25,502 at Wisconsin Motors. Suppose he has a $2000 down payment. He has found an institution on the Internet that offers conventional loans for 3 years with 5.5% interest. a) What will be Mark's monthly payment? b) How much interest will be paid over the life of this loan? c) Create an amortization schedule for the first three months of this conventional loan.

7. Mark Hohman has decided that it is time to buy a new car. He has found his dream car for $25,502 at Wisconsin Motors. Suppose he has a $2000 down payment. He has found an institution on the Internet that offers conventional loans for 3 years with 5.5% interest. a) What will be Mark's monthly payment? b) How much interest will be paid over the life of this loan? c) Create an amortization schedule for the first three months of this conventional loan.

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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Suppose you decide to wait 5 years to save up before buying the house. You are able to put a down payment of $30,000 on the house, so that you only need to borrow $170,000 from the bank. Assume the interest rate is still the same, but you are now in a better financial position, and you can pay off the loan in 240 equal monthly payments. Answer the following questions about this loan. After making 240 monthly payments, how much of what you paid the bank was interest? $ . ROUND TO THE NEAREST CENT. THANKS APPRECIATE THE HELP!!!
B) You would like to purchase a Car that costs OMR 50000. You planned with your banker to collect the amount for this project. You decided to deposit OMR 9450 each year and during 5 years. Suppose also that the bank gives an annual Interest Rate of 6%. Questions: 1. Trace the Time Line illustrating the story 2. What would be the amount collected at the end of the seventh year? 3. Will you have enough money to buy the motorcycle? How much is the difference between the amount saved and the motorcycle price? Can you buy it?
Your classmate tells you the details of the great deal he got on his mortgage: 30-year 1.1% fixed rate with a 20% down payment a.)If his new home costs $136,000, what is his down payment? b.)How much is he going to borrow to buy the house (assuming he only has the money to make the down payment from the previous part)? c.)Use Excel’s PMT function to determine how much his monthly payments would be. d.)How much will he pay in interest over the lifetime of this mortgage?
7. You plan to save every year and accumulate $150,000 in 6 years to make the down payment for your house. To achieve your financial goal, you plan to make a deposit of $20,000 per year into a bank account paying 6% annual interest. The first deposit will be made a year from today. a. Draw a timeline to visualize the problem. b. Can you achieve your financial goal? (Show your work to answer this question) c. If not, what is the minimum deposit you need to make per year in order to achive your goal? 8. You are pursuing a Bachelor's in Finance at a business school, and you will need $20,000 per year for the next 4 years to cover your college expenses. That is, you plan to withdraw $20,000 at the end each of the next 4 years, starting one year from today. To support your college education, your parents decide to make a deposit today into a bank account paying an 8% annual interest. This deposit should be sufficient to cover the four $20,000 withdrawals you will make over the next 4 years.…
A few years down the road you move out, buying your own home. You decide to take another look at your finances. Your outstanding loan of $250 per month only has 10 payments left on it (out of the original 60) with an interest rate of 12.75%. a. What is the finance charge “f”? b. What is the unearned interest “u”? c. How much would it cost to pay it off on payment #51?
. Suppose you want to buy a home after 3 years and you will need $15,000 for that. You open a savings account and deposit a lump sum amount of $2,000. You want to make a monthly payment at an interest rate of 4.5%. What should be the constant monthly payment you should make to reach the goal of $15,000 after 3 years? Explain in excel
You decide to purchase a house for $260,000. You have saved money so you are able to do a down payment of $20,000. You are able to finance your house by getting a 25 year mortgage with an interest rate of 7%. What are the monthly payments? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Part 2 - Six years later, you decide to calculate your loan balance? (Use a payment value rounded to 2 decimal places. Round your final answer to 2 decimal places.) (Hint. Use the remaining years for “N”). Part 3 - If the house appreciates at 3.12 percent per year, what will be the value of the house in eight years? (Round your final answer to 2 decimal places.) NOTE: Provide a format and show your work (example: N = 6, PV = XXX, I = X%, etc.)
Spencer would like to purchase a new car for $12,000. How much will his monthly payments be if he took out a 3-year loan at 7% interest? Show your work.
You need $20,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 6 years, with the first payment to be made one year from today. He requires a 7% annual return. What will be your annual loan payments? Do not round intermediate calculations. How much of your first payment will be applied to interest and to principal repayment? Do not round intermediate calculations. Round your answers to the nearest cent.
The Allen's want to purchase a house. They can afford $1,025 a month for 20 years and a $23,000 down payment. They finance the loan with an APR of 5.23% mortgage rate for 20 years. Determine the amount of the Allen's loan using TVM Solver on calculator. N= I%= PV= PMT= FV= P/Y= C/Y=
5) You would like to purchase a motorcycle that costs OMR 6800. You planned with your banker to collect the amount for this project. You decided to deposit OMR 575 each year and during 7 years. Suppose also that the bank gives an annual Interest Rate of 5%. Questions: 1. What would be the amount collected at the end of the seventh year? 2. Will you have enough money to buy the motorcycle? How much is the difference between the amount saved and the motorcycle price? Can you buy it?
After graduation, you just got hired by an engineering company and you were planning to take a loan in order to purchase a new car. Let's assume that the bank is willing to offer you a personal loan with an annual interest rate of 7% compounded yearly. The car price is 25,739 JD and you are capable to pay 5,400 JD per year. After how many years you will be able to pay back the loan with the accumulated interest (use a spreadsheet to answer this question) and draw the cash flow diagram?

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