How much money will the client have for new car

Reference no: EM131923337

Question: Suppose a client is in the market for a car. The client can afford to spend $500 per month, but she decides it is best to buy a cheap car now and use what is left of the $500 to save for a really nice one later. These savings will earn an effective annual rate of 9% interest. Suppose she decides to borrow $15,000 to buy a used car. The loan is for 48 months at a 7.8% APR. Three years later she sells this car for $4,500. How much money will the client have for her new car after paying off the old one assuming that all payments and compounding occurred on a monthly basis? (Do not consider sales or income taxes in the calculations.) Please show all calc's.

Reference no: EM131923337

Questions Cloud

What changed with respect to auditor responsibilities : What was objective of SOX & is it an option that management needs to comply or is it legal responsibility? What changed with respect to auditor responsibilities

Evaluate the operating industry of general mills : Evaluate the operating industry of General Mills using a minimum of two forces included within Porter's Five Forces model.

By how much does the value of money fall : If prices rise by 10 per cent, by how much does the value of money fall? Are the problems of inflation greater if the rate of inflation is variable?

Identify the companys mission and vision : As you research General Mills, you may want to compare and contrast that company with the other food service retailers.

How much money will the client have for new car : Suppose a client is in the market for a car. The client can afford to spend $500 per month, but she decides it is best to buy a cheap car now.

What is meant by the term money illusion : What is meant by the term money illusion? Why is the existence of money illusion important to the derivation of the short run Phillips Curve?

What is the period of maya motion : The swing is 1.8 meters long and has a mass of 4 kg, concentrated in the seat. If Maya and the swing form a simple pendulum, what is the period of Maya's motion

Prepare the journal entries on august : Prepare the journal entries on August 1, 2013, to record (a) the issuance of the bonds by Limbaugh and (b) the investment by Interstate

What is the actual equilibrium level of income : In a hypothetical economy which is initially in equilibrium, the consumption function is: C 100 + 0.8Y. What is the actual equilibrium level of income?

User Account

All Pages