You plan to buy a 2016 Ford Mustang GT Premium Coupe. The car has a sticker pric

Question

You plan to buy a 2016 Ford Mustang GT Premium Coupe. The car has a sticker price of $44,760. You are able to negotiate a purchase price of $43,400. The sales tax is 8.2%. The DOC fees are $350 and the registration fees are 1.6% of the purchase price. Your down payment is $2,100. You are trading your current car in. You will need to look up its value in Kelly Blue Book. You will be financing the balance for 3.9|5% for five years. What are your monthly payments? What is your total price for this car? Assume the yearly registration fees are constant and include four more years of registration fees.

Explanation / Answer

Interest rate = 3.95%

Number of EMI = 60

Cumulative PV at 3,95% for 5 years = 4.4581

Since payments are made monthly, the interest rate is divided to months which will be = 0.658% per month

Cumulatie PV for 0.658% for 60 periods = 49.4397

The EMI should be = $986.905

Table shown below

The PResent Value of the car is the value computed above excluding 4 years registration + PV of 4 yers registration cost

=(50892.32) + (694.4*3.6342) = $53415.89

Sale Value 43400 Sales Tax @ 8.2% 3670.32 DOC Fees 350 Registration fees 694.4 4 years registration 2777.6 Total 50892.32 Down Payment 2100 Finance Value 48792.32

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