Ricardo recently received a major promotion at work and a significant raise. He is shopping for a new car. He really likes large sport utility vehicles and has his eye on one priced at $45,000. He is not sure how to finance the vehicle, however. He has three choices.
1. The dealer has offered to finance the vehicle with zero down on a six-year, 14%loan.
2. A local bank will finance the vehicle for five years at 10% if he makes a 15% down payment.
3. His credit union will finance the vehicle for four years at 8% if he makes a 25% down payment.
Under all three options, equal-sized end-of-the-month payments are required. Ricardo has the cash available for a down payment but was hoping to use it for other purposes.
Required. Use the Excel PMT function to help you answer the following questions.
A. For each financing alternative, Identify the rate, number of periods, and amount that you must enter into the PMT function.
B. What is the size of the size of the monthly payment under each alternative?
C. Based only on your answers to parts A and B, which option looks best to you?
D. What is the sum of the payments required under each financing option?
E. What total amount of interest will be paid under each financing option?
F. Based on the information available which financing option would you recommend to Ricardo?
The book is financial accounting; information for decisions. by ingram/albright.
Really need help on this problem, If anybody can answer it or help me email it to [email protected] thanks.
the email is [email protected]
1. The dealer has offered to finance the vehicle with zero down on a six-year, 14%loan.
2. A local bank will finance the vehicle for five years at 10% if he makes a 15% down payment.
3. His credit union will finance the vehicle for four years at 8% if he makes a 25% down payment.
Under all three options, equal-sized end-of-the-month payments are required. Ricardo has the cash available for a down payment but was hoping to use it for other purposes.
Required. Use the Excel PMT function to help you answer the following questions.
A. For each financing alternative, Identify the rate, number of periods, and amount that you must enter into the PMT function.
B. What is the size of the size of the monthly payment under each alternative?
C. Based only on your answers to parts A and B, which option looks best to you?
D. What is the sum of the payments required under each financing option?
E. What total amount of interest will be paid under each financing option?
F. Based on the information available which financing option would you recommend to Ricardo?
The book is financial accounting; information for decisions. by ingram/albright.
Really need help on this problem, If anybody can answer it or help me email it to [email protected] thanks.
the email is [email protected]