• eBook

1. You have saved $5,000 for a down payment on a new car. The largest monthly payment you can afford is $400. The loan will have an 11% 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.

2. Find the present values of these ordinary annuities. Discounting occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent.

1. $400 per year for 14 years at 8%.

   $

2. $200 per year for 7 years at 4%.

   $

3. $700 per year for 8 years at 0%.

   $

4. Rework previous parts assuming they are annuities due.

   Present value of $400 per year for 14 years at 8%: $

   Present value of $200 per year for 7 years at 4%: $

   Present value of $700 per year for 8 years at 0%: $