You are offered two options by the Waverley Toyata dealer for purchasing a Toyota landcruiser 4WD Option
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Question:
Option 1: upfront where you pay $100,000 now
Option 2: 2-year monthly payment plan of $4500/month, starting today, with a final payment to be made 23 months from today
1) Assume that you have chosen option 2 to purchase the car. Immediately after the 12th monthly payment, you encounter some temporary financial difficulty and are only able to afford monthly payment of $4000. After negotiating with the dealer, they are happy for you to pay $4000 per month for the rest of the contract and a final lump sum payment right at the end of the contract. if the market interest rates rate is still 6% p.a., how much would this final lump sum payment be so that you will not be worse off by this new arrangement?
Related Book For
Economics of Money, Banking and Financial Markets
ISBN: 978-0321598905
9th Edition
Authors: Frederic S. Mishkin
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