5. Suppose you need $10,000 in one year for the down payment on a new car. If you can earn 7% annually, how much do you need to invest today?

Q: You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million…

A: Time value of money :— It means that value of money in present days has more as compared from same…

Q: The price of a car you want is $42,000 today. Its price is expected to increase by $1000 each year.…

A:

Q: Suppose you would like to save enough money to pay cash for your next car. The goal to save an extra…

A: Computation of quarterly deposit:Hence, the quarterly deposit is $921.76.

Q: Mr. Rambo wants to save for a new pickup that he expects will cost 1,900,000 four and one-half years…

A: Cost = 1,900,000 four and half years from now N = 4 Interest Rate = 6.25%

Q: you are saving money to buy a car. if you save $290 per month starting one month from now at an…

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: Suppose you can afford to pay $ 250 a month for 8 years towards a new car with no down payment. If…

A: Given details are : Monthly payment = $250 Time period = 8 years Interest rate = 4.75% We need to…

Q: You would like to purchase a motorcycle that costs OMR 6800. You planned with your banker to collect…

A: Formula: Future value = (Amount*((1+rate)^years -1)/Rate

Q: You took out a loan to buy a new car. The monthly interest rate on the loan is 1%. You have to pay…

A: A= $220 R= 1% N= 60

Q: How much will you invest every month, so by earning interest at 5% compounded monthly, there will be…

A: Future Value of Annuity: It computes the future value of the current annuity payment compounded over…

Q: You want to save up enough money to purchase a new computer, which costs $4,500. You currently have…

A: Here, Required Amount (FV) is $4,500 Current Amount in Account (PV) is $4,000 Interest Rate is 8%

Q: You are saving money to buy a car. If you save $330 per month starting one month from now at an…

A: Calculation of Future value:The value after 4 years is $18,981.83.Excel spreadsheet:

Q: Suppose you will need $20,000 in 3 years. How much must you invest per month in order to have…

A: Present value is the current worth of the amount that is expected to be received in future date.

Q: (Use Formula Approach or Calculator Approach) Suppose you want to borrow $20,000 for a new car. You…

A: Monthly mortgage payments or EMI is the monthly loan payments made for the loan. A monthly loan…

Q: A student wants to save up for a car, assuming that he/she would be able to save up a certain sum…

A: Given information: Future value of car : 255000 Time period : 4 years Interest rate : 14%

Q: Sue decides to start saving money for a new car. She knows she can invest money into an account…

A: According to time value of money, FV=PV×1+RMM×N Where, PV = present value R = rate of interest M=…

Q: You have a client who wants to buy a house. He needs $40,000 for a down payment and has $30,000…

A: Here we have to invest $ 30000 at the 5% annual rate but compounded quarterly. and want $ 40000 in…

Q: Barbara knows that she will need to buy a new car in 3 years. The car will cost $15,000 by then. How…

A: The present value is the present worth of the payment that will be paid or received in the future.

Q: Suppose you want to buy a new house. You currently have $15 000 and you figure you need to have a…

A: Current amount (P) = $15000 House cost = $150000 Down payment and closing costs needed (F) = (10% +…

Q: Suppose you buy a car for $18,400 and finance it at 8%. Determine the monthly payment and total cost…

A: Hi, since you have posted multiple questions, we will answer the first one, as per authoring…

Q: (Use Calculator or Formula Approach) Suppose you need $15,000 in 3 years . If you can earn 6%…

A: Present value is the present worth of any sum of a money to be received in the future at a specified…

Q: If you borrow $25,000 from a local finance company and you are required to pay $4,424.50 per year…

A: Given values: Present value (PV) is $25,000. Annual payments (PMT) are $4,424.50. Maturity period…

Q: You would like to save for a car. You would like to have $20,000 saved in 5 years. You decide to…

A: Recurring deposit is an annuity where same amount is deposited with an institution over cardinal…

Q: We really want a new car and want to know if we can realistically afford it but also see how much…

A: Monthly payment is calculated by pmt formula in excel.

Q: As part of your financial planning, you wish to purchase a new car exactly 5 years from today. The…

A: Present value of the car = $20,000 When the inflation rate is 2% Future value of the car = Present…

Q: If you could invest the mon

A: The present value of the amount to be invested today can be computed as follows using the Texas BA 2…

Q: Today, your dream car costs $50,100. You feel that the price of the car will increase at an annual…

A: We need to find future value of the car if grown at 2.1%

Q: Suppose you want to buy a home after 3 years and you will need $15,000 for that. You open a savings…

A: As per the time value of money, a dollar is worth more today than the same dollar in the future.…

Q: You want to have $35,000 in cash to buy a car 3 years from today. You expect to earn 3.6 percent,…

A: In this we have to calculate present value of future value.

Q: You need $2,000 to buy a new stereo for your car. If you have $500 to invest at 14% compounded…

A: In this question we need to compute the number of years i.e. time period. This question is based on…

Q: uppose you save $4,000 per year at the end of each year for 30 years and earn 5% interest per year.…

A: Annual saving = $ 4000 Period= 30  Years Annual interest rate = 5%   As per formula         Value…

Q: You are saving money to buy a car.  If you save $310 per month starting one month from now at an…

A: Interest rate is 6% Monthly saving is $310 Time Period is 4 years

Q: How much do you need to save each year for 30 years in order to have $775,000, assuming you are…

A: Given information: Future value amount is $775,000 Interest rate is 8% Number of years is 30

Q: You want to buy a new sports car 3 years from now and you want to save $4,200 per year, beginning…

A: Using excel FV function

Q: You found the perfect car but costs $30,000. How much is your monthly payments if your bank charges…

A: Principal loan amount (P0) = $30,000 Monthly interest rate (r) = 0.00208333333333333 (i.e. 0.025 /…

Q: You want to invest $27,000 today to accumulate $30,390 to buy a car. If you can invest at an…

A:

Q: A student wants to save up for a car, assuming that he/she would be able to save up a certain sum…

A: Given information, Time Period = 4 years*12 =48 periods (when period is monthly) Future Value of…

Q: Suppose you would like to have P25,000 saved 6 years from now to pay towards your down payment on a…

A: Future value of ordinary annuity(payments at end of year) concept is used to calculated the annual…

Q: How much do you have to invest today to have $25,000 for the purchase of a car four years from now…

A: We will solve this by using compounding interest method , using following formula : Amount =…

Q: You would like to put some money into an account so that you will have $6000 in the account 13 years…

A: Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv], [type])…

Q: If you want to accumulate $400,000 and you have $17,000 saved now, how many years will it take if…

A: GIVEN, PV = $17000 FV = $400,000 A= $490 R=4% M=12

Q: 20. Suppose you borrow $10,000 from your parents to buy a car. You agree to pay $207.58 per month…

A: As per the time value of money, a dollar is worth more today than the same dollar in the future.…

Q: Let's assume that the price of a new jeep will always be 200,000. You only have 77,520. How many…

A: When current saving is invested in order to reach a particular financial goal, with prescribed rate…

Q: You are buying your first car and need to borrow P1,600,000 over 5 years. If interest is 6%, what…

A: The monthly payment amount can be calculated with the help of present value function

Q: Steve Fisher is saving for a new car. He needs to have $ 21,000 for the car in three years. How much…

A: Present worth is the value of the amount in current times that is expected to be received in some…

Q: You want to buy a car, and the local bank will lend you $20,000. The loan will be fully amortized…

A: Present value (PV) refers to the present value of a future sum of money or some sort…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.