You want to buy a new car, but you can make an initial payment of only $1,000 an

Question

You want to buy a new car, but you can make an initial payment of only $1,000 and can afford monthly payments of at most $900.

If the APR on auto loans is 12% and you finance the purchase over 48 months, what is the maximum price you can pay for the car? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

How much can you afford if you finance the purchase over 60 months? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

You want to buy a new car, but you can make an initial payment of only $1,000 and can afford monthly payments of at most $900.

Explanation / Answer

a) Rate = 12%/1 1% NPER = 48 PMT = 900 PV = ? Solve for PV PV of instalments =   $34,176.56 Add down payment made 1000 Maximum price for the car = $35,176.56 b) Rate = 12%/1 1% NPER = 60 PMT = 900 PV = ? Solve for PV PV of instalments =   $40,459.53 Add down payment made 1000 Maximum price for the car = $41,459.53

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.