Alter the interest rate or the three-year term

Assignment Help Financial Management

Reference no: EM131178068

Joanne Krol wants to purchase a newer model automobile to replace her rusty 1989 car. The bank where Joanne has a checking account, US Bank, is advertising an annual interest rate of 6.75 percent for a three-year loan on used cars. By selling her old car and using some cash she has accumulated, Joanne has $3,000 available as a down payment. Under her current budget, Joanne figures that the maximum monthly loan payment she can afford is $300. She wants to find out the maximum car price she can afford and keep the monthly payment no higher than $300. She cannot alter the interest rate or the three-year term. Use the Excel Goal Seek command to figure out the highest purchase price Joanne can afford.

Reference no: EM131178068

Questions Cloud

What is the company return on equity and total assets : Martinez, Inc., has a total debt ratio of 0.49, total debt of $330,000, and net income of $42,000. What is the company’s total assets? What is the company’s return on equity?

Unfunded nonqualified deferred compensation plan : Which of the following are characteristics of an unfunded nonqualified deferred compensation plan?

Calculate the current ratio for each company : Potz and Pans, a small gift shop, has current assets of $45,000 (including inventory valued at $30,000) and $9,000 in current liabilities. WannaBees, a specialty clothing store, has current assets of $150,000 (including inventory valued at $125,000) ..

The ratio of the market value of equity to its book value : A firm has current assets that could be sold for their book value of $40 million. The book value of its fixed assets is $78 million, but they could be sold for $108 million today. The firm has total debt with a book value of $58 million, but interest..

Alter the interest rate or the three-year term : Joanne Krol wants to purchase a newer model automobile to replace her rusty 1989 car. The bank where Joanne has a checking account, US Bank, is advertising an annual interest rate of 6.75 percent for a three-year loan on used cars. She cannot alter t..

Redo the pareto diagram with the after results : Assume that Figure 18–4 is the before diagram for the Billing department. Further assume that the after results are as follows: Activity Activity Code Number Process Denied Bills PDB 12 Review with Supervisor RWS 10 Locate Documentation LD 6 Copy Doc..

Current stock price-what is cost of common equity : The current stock price is 60.15, the growth rate is 4%, the expected earnings per share e is $5. The company retains 20% of its earnings to fund future growth. There is currently 102.5 million shares outstanding. What is the cost of common equity?

What is the dollar equivalent : Suppose there is an interest rate spread of 1% between the United States and South Africa (S.A.). The yield on a one-year U.S. Treasury security is 5% (rd = 5%) while the yield on a comparable South African security is 6% (rF = 6%). You wish to inves..

What is your rate of return on the fund : You purchased 2,000 shares of the New Fund at a price of $12 per share at the beginning of the year. You paid a front-end load of 4%. The securities in which the fund invests increase in value by 12% during the year. The fund's expense ratio is 2.2%...

User Account

All Pages