CAR PAYMENTS - Present value, discount rate Johnson recently bought a new car by making a downpayment of $6,500. He has a 5-year car loan which requires him to pay $500 each month at an annual rate of 8%. What if Johnson paid $500 per month at 6.5% interest? http://www.tvmcalcs.com/calculators/excel_tvm_functions/excel_tvm_functions_page1 PV of CAR PAYMENTS Assumptions Downpayment Monthly payment Annual rate Monthly rate Term of loan in years 2 No of periods/year 3 Total no. of payment/periods 5 PV 5 Total amount paid for the car/Cost of the car PV of car loan payments 3 PV of total payment for the car (with loan) 9 O 1. What is the total cost of the car? What if $ 6,500.00 $ 6,500.00 $ 500.00 $ 500.00 8% 6.50% 5 5 12 12 $ 12. At 8%, what is the present value of Johnson's total car loan payment? $ 23. At 8%, PV of total payment for the car is? $ 34. At 6.5%, what is the present value of Johnson's total car loan payment? 45. At 6.5%, PV of total payment for the car is? $ $ =