Dennis Lamenti wants to buy a new car that costs $15,326.72. He has two possible loans in mind. One loan is through the car dealer; it is a four-year add-on interest loan at 7
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Dennis Lamenti wants to buy a new car that costs $15,326.72. He has two possible loans in mind. One loan is through the car dealer; it is a four-year add-on interest loan at
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and requires a down payment of $1,000. The second is through his bank; it is a four-year simple interest amortized loan at
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| 4 |
and requires a down payment of $1,000. (Round your answers to the nearest cent.)
| dealer | $ |
| bank | $ |
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- Dennis Lamenti wants to buy a new car that costs $15,326.72. He has two possible loans in mind. One loan is through the car dealer; it is a four-year add-on interest loan at 7 3 4 % and requires a down payment of $1,000. The second is through his bank; it is a four-year simple interest amortized loan at 7 3 4 % and requires a down payment of $1,000. (Round your answers to the nearest cent.) (b) Find the total interest paid for each loan. dealer $ bank $Dennis Lamenti wants to buy a new car that costs $15,177.57. He has two possible loans in mind. One loan is through the car dealer; it is a four-year add-on interest loan at 7 3/4% and requires a down payment of $1,000. The second is through his bank; it is a four-year simple interest amortized loan at 7 3/4% and requires a down payment of $1,000. (Round your answers to the nearest cent.) (a) Find the monthly payment for each loan. dealer ? bank ? (b) Find the total interest paid for each loan. dealer ? bank ?Barry Wood wants to buy a used car that costs $4,000. He has two possible loans in mind. One loan is through the car dealer; it is a three-year add-on interest loan at 6% and requires a down payment of $300. The second is through his credit union; it is a three-year simple interest amortized loan at 9.5% and requires a 10% down payment. (Round your answers to the nearest cent.) (a) Find the monthly payment for each loan. dealer $ credit union $ (b) Find the total interest paid for each loan. dealer $ credit union $ (c) Which loan should Barry choose? Why? He should choose the car dealer add-on interest loan because he pays less interest.He should choose the credit union simple interest loan because he pays less interest.
- Barry Wood wants to buy a used car that costs $5000. He has two possible loans in mind. One loan is through the car dealer; it is a three-year add-on interest loan at 6% and requires a down payment of $300. The second is through his credit union; it is a three-year simple interest amortized loan at 7.5% and requires a 10% down payment. (a) Find the monthly payment for each loan. (Give your answer to the nearest cent.) Dealer $ Credit Union $ (b) Find the total interest paid for each loan. (Give your answer to the nearest cent.) Dealer $ Credit Union $Suppose you want to buy a car. You have surveyed the dealers' newspaper advertisements, and the one shown has caught your attention. You can afford to make a down payment of $2,678.95, so the net amount to be financed is $20,000.(a) What would the monthly payment be?(b) After the 25th payment, you want to pay off the remaining loan in a lumpsum amount. What is this lump sum?You are planning to buy an used car from a local dealer. The list price of the car is $12,000. If you pay cash, the cost of car is $11,000. The dealer also offers you the choice of paying $5,500 down with 3 equal year-end payment of $2,100. You have $5,500 cash. If you prefer, you can borrow the rest from your bank with a personal loan of 10% interest rate. What is the dealer's implied interest rate? Do you accept the dealer credit sale or borrow from the bank? List price of car Downpayment Cash cost of car Bank rate of interest Year 0 1 2 3 12,000 5,500 11,000 10% Payment in cash -11,000 0 0 0 Payment with credit -5,500 -2,100 -2,100 -2,100 Cash spent or saved with credit plan 5,500 -2,100 -2,100 -2,100
- David is taking out an amortized loan for $13,000 to buy a new car and is deciding between the offers from two lenders. He wants to know which one would be the better deal over the life of the car loan, and by how much. Answer each part. Do not round intermediate computations, and round your answers to the nearest cent. If necessary, refer to the list of financial formulas. (a) A bank has offered him a 6-year car loan at an annual interest rate of 5.7%. Find the monthly payment. $0 (b) An online lending company has offered him a 7- year car loan at an annual interest rate of 5.7%. Find the monthly payment. $ (c) Suppose David pays the monthly payment each month for the full term. Which lender's car loan would have the lowest total amount to pay off, and by how much? O Bank The total amount paid would be $0 less than to the online lending company. O Online lending company The total amount paid would be $0 less than to the bank. XTom needs a car to commute to work and has found a suitable Honda Civic from a dealer for $8000. He has $3000 saved for it and can afford a monthly payment up to $250. Which of the following is the best (lowest total cost) financing option for him? O a. Make a $3000 deposit and take a two year loan with monthly payments of $221. O b. Make a $2000 deposit and take a three year loan with monthly payments of $185. O c. Make a $2500 deposit and take a two year loan with monthly payments of $241. O d. Make a $1000 deposit and take a three year loan with monthly payments of $210.suppose that you decide to borrow $15,000 for a new car. you can select one of the following loans, each requiring regular monthly payments. Installment loan A: 3-year loan at 5.9% Installment loan B: 5-year loan at 6.4% a.- find the monthly payments and the total interest for loan A b.-find the monthly payments and the total interest for loan B c.- compare the two loans. which is more economical?
- You need to purchase a car, but don’t have the money to buy it outright. Therefore, you’ll have to borrow money for a loan. Your current situation is this:• The car you want to buy costs $11,999• You have $5500 saved for a down payment on the car.• The dealer offers add-on interest loans for 7% per year, for 1, 3, or 5 years.• You want to keep your car payments under $250 per month.(a) Calculate the monthly payments for 1, 3, or 5 years. Can you afford any of these loan terms?Explain.(b) Compute the total interest you’ll pay over the life of each loanCharlie is taking out an amortized loan for $14,000 to buy a new car and is deciding between the offers from two lenders. He wants to know which one would be the better deal over the life of the car loan, and by how much. Answer each part. Do not round intermediate computations, and round your answers to the nearest cent. If necessary, refer to the list of financial formulas. (a) A savings and loan association has offered him a 6-year car loan at an annual interest rate of 7.2%. Find the monthly payment. ? $0 (b) An online lending company has offered him a 5-year car loan at an annual interest rate : of 7.2%. Find the monthly payment. $0 (c) Suppose Charlie pays the monthly payment each month for the full term. Which lender's car loan would have the lowest total amount to pay off, and by how much? O Savings and loan association The total amount paid would be $less than to the online lending company. O Online lending company The total amount paid would be less than to the savings and…John is looking for a new car. He has a down payment of $1,000.00 and wants to pay $350.00 per month for 5 years. The best deal he found for an amortized loan is his local bank, at a rate of 2.65%. What is the highest price car he should consider buying?
