Finance: Problem Set 3 Directions: 1. Solve the following problems. on your own paper. Do not wrte answers on this page Siow your work AND explain your reasoning using complete English sentences. Explanations must directly follow the solution for each part of the problem. Hand write your solutions and explanations 2. 3. You must write your name on the top right of the paper you turn in. 4. You must write the title of this problem set on the top of your paper. S. Turn in your solutions following the directions in the assignment information n Canvas. 1. Print out the form above. You may fill in the numbers on that pag e as indicated. All work must be shown on a separate piece of paper. Write your name under the Purchaser's Name part of the contract. You do not need to fill out the address information. For the car you selected, write the year, make, model, and MSRP in the Vehicle Being Purchased box in the left side of the contract. [0.5 pt] Suppose you are able to negotiate a selling price of95% of the MSRP. 2. 3. Write the selling price into the Selling Price line of the contract. You may carry this value down to the Price After Equipment Change line. 4. Assume you have no trade-in. Write your selling price in the Taxable Total line of the contract [0.5 pt] Calculate the sales tax and write this amount in the Sales Tax line of the 5. contract. In the state of Arizona, the tax rate is different depending on where you purchase your car. Currently the Arizona sales tax rate is 5.6%. Maricopa County adds on 0.7% sales tax to support roads and jails. Phoenix has a city tax of 2.3%. That's a total of8.6% ifyou purchase your car in the city of Phoenix. Assume we're buying the car in the city of Phoenix, so use the 8.6% sales tax rate. The license fee is 2.8% ofthe value ofyour car. The value ofyour car is 60% of the MSRP (not the purchase price). write the license fee in the License Fee line of the contract. Ex: If the MSRP is $25,000, the value of your car would be 6 [1 pt] $25,000 x 0.60 $15,000 Use this value to calculate the license fee. This value is NOT your license fee 7. 8, 9. Add the title service fee, license fee, sales tax, and purchase price to obtain the total due. Write this amount in the Total Due line of the contract. [1 pt] You plan to make a 10% down payment, write your down payment in the Total Cash Down box. Calculate the balance due and write this value in the Balance Due line of the contract. Now we will move on to the financing a Financing: Write the financing information under the FEDERAL TRUTH-IN-LENDING DISCLOSURES part of the contract 10. Indicate the amount borrowed (balance due) in the Amount Financed box. 11. Assume you can secure a loan at 3.9% for 36 months, write these values in the l Calculate your monthly payment and write this value in the Amount of appropriate information in the Total of Payments and Total Finance Annual Percentage Rate and Number of Payments boxes. Payments box. 13. 12 pts] Find the total amount of interest paid during the loan and write the Charge boxes RETAIL.ORDER FOR A MOTOR VEHICLE Steps 1-13 . 3.9% for 36 months Vebicle Being Parchased City Vehicle Identification Nember Vehlcle Being Traded-In Vehicle Identfcation Nember KBB Value PRICE AFTERQUIPMENT CHANCE FACTORY WARRANTY: Any warranty an any new webice oe used vehicle still subject to a manufacturer's warranty is that made by new veticie oe us LESTRADE ALLDWANGE either express or impiled, Incuding any implied warranty or merchantability or ealy. The seller hereby disclains al fitness for a particuiar purpot SALES TAX LICENSE FEE TITLE SERVICE FES FEDERAL TRUTIH-IN-LEN Amount Flnanced Anual Percentap Nunber of Payments Total of Payments Toal Pnance TOTAL DUE Amount of Payments TOTAL CASH DOWN The information you see on the window 8orm for this vehicle is part of this contract Information n the window form overrides any contrary provislons in the contract of sale BALANCE DUE Liability Insurance coverage for bodily injury and property damage caused by others not included. Finance: Problem Set 3 Directions: 1. Solve the following problems. on your own paper. Do not wrte answers on this page Siow your work AND explain your reasoning using complete English sentences. Explanations must directly follow the solution for each part of the problem. Hand write your solutions and explanations 2. 3. You must write your name on the top right of the paper you turn in. 4. You must write the title of this problem set on the top of your paper. S. Turn in your solutions following the directions in the assignment information n Canvas. 1. Print out the form above. You may fill in the numbers on that pag e as indicated. All work must be shown on a separate piece of paper. Write your name under the Purchaser's Name part of the contract. You do not need to fill out the address information. For the car you selected, write the year, make, model, and MSRP in the Vehicle Being Purchased box in the left side of the contract. [0.5 pt] Suppose you are able to negotiate a selling price of95% of the MSRP. 2. 3. Write the selling price into the Selling Price line of the contract. You may carry this value down to the Price After Equipment Change line. 4. Assume you have no trade-in. Write your selling price in the Taxable Total line of the contract [0.5 pt] Calculate the sales tax and write this amount in the Sales Tax line of the 5. contract. In the state of Arizona, the tax rate is different depending on where you purchase your car. Currently the Arizona sales tax rate is 5.6%. Maricopa County adds on 0.7% sales tax to support roads and jails. Phoenix has a city tax of 2.3%. That's a total of8.6% ifyou purchase your car in the city of Phoenix. Assume we're buying the car in the city of Phoenix, so use the 8.6% sales tax rate. The license fee is 2.8% ofthe value ofyour car. The value ofyour car is 60% of the MSRP (not the purchase price). write the license fee in the License Fee line of the contract. Ex: If the MSRP is $25,000, the value of your car would be 6 [1 pt] $25,000 x 0.60 $15,000 Use this value to calculate the license fee. This value is NOT your license fee 7. 8, 9. Add the title service fee, license fee, sales tax, and purchase price to obtain the total due. Write this amount in the Total Due line of the contract. [1 pt] You plan to make a 10% down payment, write your down payment in the Total Cash Down box. Calculate the balance due and write this value in the Balance Due line of the contract. Now we will move on to the financing a Financing: Write the financing information under the FEDERAL TRUTH-IN-LENDING DISCLOSURES part of the contract 10. Indicate the amount borrowed (balance due) in the Amount Financed box. 11. Assume you can secure a loan at 3.9% for 36 months, write these values in the l Calculate your monthly payment and write this value in the Amount of appropriate information in the Total of Payments and Total Finance Annual Percentage Rate and Number of Payments boxes. Payments box. 13. 12 pts] Find the total amount of interest paid during the loan and write the Charge boxes RETAIL.ORDER FOR A MOTOR VEHICLE Steps 1-13 . 3.9% for 36 months Vebicle Being Parchased City Vehicle Identification Nember Vehlcle Being Traded-In Vehicle Identfcation Nember KBB Value PRICE AFTERQUIPMENT CHANCE FACTORY WARRANTY: Any warranty an any new webice oe used vehicle still subject to a manufacturer's warranty is that made by new veticie oe us LESTRADE ALLDWANGE either express or impiled, Incuding any implied warranty or merchantability or ealy. The seller hereby disclains al fitness for a particuiar purpot SALES TAX LICENSE FEE TITLE SERVICE FES FEDERAL TRUTIH-IN-LEN Amount Flnanced Anual Percentap Nunber of Payments Total of Payments Toal Pnance TOTAL DUE Amount of Payments TOTAL CASH DOWN The information you see on the window 8orm for this vehicle is part of this contract Information n the window form overrides any contrary provislons in the contract of sale BALANCE DUE Liability Insurance coverage for bodily injury and property damage caused by others not included