1 Assignment 8 ENGR 3315 Fall 2017 Submitted by: Lee Hinkle (key) 2 3$33,560.00

Question

1 Assignment 8 ENGR 3315 Fall 2017 Submitted by: Lee Hinkle (key) 2 3$33,560.00 Car Price 4 $2,500.00 Trade-In for current car -$1,000.00 Down Payment 6 $30,060.00 Amount Financed 7 8 9 10 $775.00 Monthly Payment 4 Years Financed 11.43% Effective Annual Interest Rate 6% New Interest Rate $705.96 New Payment Amount 12 13 14 15 16 5 New Number Years Financed @ New Rate $581.14 New Payment Amount 17 Same terms, but need $500 payment, how much can you finance? 18$25,862.78 19 20 21 Numbers in white are to be entered 22 Numbers in grey are calculated

Explanation / Answer

Amount financed is correct

time period = 4 years or 48 months

monthly rate = rate(48,775,-30060)

Effective annual rate = (1 + monthly rate)12 - 1 = 11.43%

interest rate = 6%

monthly interest rate = 6%/12

New payment amount = pmt(6%/12, 48, -30060) = $705.96

Time period = 5 years or 60 months

monthly interest rate = 6%/12

New payment amount = pmt(6%/12, 60, -30060) = $581.14

Payment = $500 per month

monthly interest rate = 6%/12, time period = 60 months

Amount financed = pv(6%/12,60,-500) = $25862.78

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