You are looking to buy a car. You can afford $650 in monthly payments for five years. In addition to the loan, you can make a $750 down payment. If interest rates are 8 percent APR, what price of car can you afford?
Answer to relevant QuestionsA perpetuity pays $100 per year and interest rates are 7.5 percent. How much would its value change if interest rates increased to 9 percent? Did the value increase or decrease? What is the interest rate of a 6-year, annual $5,000 annuity with present value of $20,000? Given an 8 percent interest rate, compute the year 7 future value if deposits of $1,000 and $2,000 are made in years 1 and 3, respectively, and a withdrawal of $700 is made in year 4. Monica has decided that she wants to build enough retirement wealth that, if invested at 8 percent per year, will provide her with $3,500 of monthly income for 20 years. To date, she has saved nothing, but she still has 30 ...If the present value of an ordinary, 7-year annuity is $6,500 and interest rates are 7.5 percent, what’s the present value of the same annuity due?
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