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PV AND LOAN ELIGIBILITY You have saved $4,000 for a down payment on a new car. T

ID: 2811524 • Letter: P

Question

PV AND LOAN ELIGIBILITY

You have saved $4,000 for a down payment on a new car. The largest monthly payment you can afford is $350. The loan will have a 8% APR based on end-of-month payments.

What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent.
$  

What is the most expensive car you can afford if you finance it for 60 months? Do not round intermediate calculations. Round your answer to the nearest cent.
$  

Explanation / Answer

What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent.

Expensive car you can afford=14336.67+4000=$18336.67

What is the most expensive car you can afford if you finance it for 60 months? Do not round intermediate calculations. Round your answer to the nearest cent.

Expensive car you can afford=$17,261.45+4000=$21261.45

N 48 I/Y 8%12 0.67% PMT -350 FV 0 CPT PV $14,336.67