You have saved $5000 for a down payment on a new car. The largest mont

QUESTION

You have saved $5000 for a down payment on a new car. The largest monthly payment you can afford is $350. The loan would have a 10% APR based on the end of month payments. What is the most expensive car you could afford if you finance it for 48 months? for 60 months? I have seen other examples of¦
1. nper =48 months. Here we have monthly PMT=$350, Int rate RATE = 10% monthly. Lets find FV of annuity of PMT=350 FV of annuity = FV(Rate,nper,PMT) = FV(10%/12,48,-350) = $20,552.87 SO FV of Loan payments is $20,552.87. SO you can buy a car costing upto $20,552.87 2. nper =60 months. Here we have monthly PMT=$350,¦

t rate RATE = 10% monthly. Lets find FV of annuity of PMT=350 FV of annuity = FV(Rate,nper,PMT) = FV(10%/12,60,-350) = $27,102.98 SO FV of Loan payments is $27,102.98. SO you can buy a car costing upto $27,102.98

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