Please help with my construction manegment hw question. QUESTION 3 Sally is a ju

Question

Please help with my construction manegment hw question.

QUESTION 3 Sally is a junior at KU and would like to buy a new car. Her loan from the car dealership is deferred for the first 12 months and then she makes 50 end-of-month payments thereafter. Given the original loan is for $32,000 with an interest of 0.5% per month in the unpaid balance, how much does Sally need to have for monthly payments? OA B. $4,082 ° C. $726 OD.$2,755 QUESTION 4 David needs a lump sum loan of $17,000 to buy a new boat. The seller gives him two options (a) a loan with 12% interest per year, or (b) a loan with 8% interest per year. What is the difference in total interest accumulated by these two types of loans if David decides to repay the loan in 5 years? A. $1,924 OB. $29,959 ° C. $4,981 O D.$24,978

Explanation / Answer

Question - 3

When we deferred the payments for 12 months ........ accrued amount to paid in instalments shall be = 32000 * ( 1.005)12 = 33974

The present value of Interest factor annuity = PVIFA = [ 1 - (1+ r )-n ] / r

= [ 1 - (1.005)-50 ] / 0.005 = 44.1

Now Monthly Installment = Amount due / PVIFA = 33974 / 44.1 = 171 ....... Option - A

Question - 4

Select - Option - C 4981

= 17000 [ (1.12)5 - (1.08)5 ] = 17000 * [ 1.7623 - 1.4693 ] = 4981

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