Judy has $2,000 for a down payment on a vehicle and she can afford monthly payments of $400. She wants to finance a vehicle over no more than 4 years. If lenders are currently offering 6% interest on 5-year loans, what is the maximum price Judy can pay for a vehicle?
In order to calculate how much Judy can afford on her vehicle, first calculate the present value of the loan for a period of 5 years.
To calculate the PV, consider the following arguments:
PMT = $400, I = 6%/12 months = 0.5%, N = 5 years × 12 months = 60 months
PV= $20,690.22
Judy can afford a total $22,690 for a vehicle. It is the sum of $2,000 as down payment and $20,690 over a period of 5 years to purchase a new car. REJ: Please see the section "Buying an Automobile" for more information.
You might also like to view...
By generating accurate forecasts of demand, time-phased delivery schedules can be developed. This is the underlying idea behind the ______ system.
A. material requirements planning (MRP) B. manufacturing resource planning (MRP II) C. enterprise resource planning (ERP) D. distribution requirements planning (DRP)
If a purchaser of all a corporation's assets continues the seller's product line, some courts impose upon the purchaser strict tort liability for defects in products previously manufactured by the seller corporation
a. True b. False Indicate whether the statement is true or false
According to the U.S. Bureau of the Census, over ____ million Americans have disabilities or impairments.
A. 30 B. 40 C. 50 D. 60
Which of the following is an example of a nonprofit organization?
A. Costicon, a regional retail store that sells goods at discounted prices B. Hollorg, a community museum that is funded by a trust and is free for public use C. Tempim, a local newspaper house that sells newspaper at prices lower than its competitors D. Modashows, a fashion publication house that issues free subscriptions of its weekly magazines to consumers who are yearly subscribers