Katie S Kash Only Will Sell You the Car Today for $11,463.69

Sharmaine’s New Car Deals has offered you the following deal on a brand new used Nissan Versa. You buy the car for $12,600 payable in 24 equal monthly payments that include interest at 4%)

You went down the street to Austin Wolverines Mostly Honest New Car Leasing Company (located in Toledo Michigan) and find he will lease you the car for 36 months at 360.75 per month. Under this deal you put $500 down today and can buy the car at the end for $8,000. Assume you will buy the car at the end if you take this deal.

Taylor’s Tailored Deals will sell you the car for $14,000. You put $2,000 and then pay nothing for 24 months. At the end of 24 months, you send her $12,000.

Katie’s Kash Only will sell you the car today for $11,463.69.

Jack’s “Get ‘er dun deals” will lease you the car for 60 months for payments of $204.27. The deal calls for $1,204.27, which includes the first payment, due today. At the end of the lease you get the car for $10.00.

You called the bank and they told you that current interest rates on car purchase is 6.27%. They will finance the car for you, with no money down, for 48 months.

What to do…… What to Do.

Sharmaine’s New Car Deals has offered you the following deal on a brand new used Nissan Versa. You buy the car for $12,600 payable in 24 equal monthly payments that include interest at 4%)

2nd clr TVM

24 n

12,600 pv

4/12 = I/Y

Cpt pmt

547.15

6.27/12 = I/Y

12,311.54

2nd clr TVM

36 n

360.75 pmt

8,000 FV

6.27/12 = I/Y

Cpt PV

18,442.17

+500

= 18,942.17

Taylor’s Tailored Deals will sell you the car for $14,000. You put $2,000 and then pay nothing for 24 months. At the end of 24 months, you send her $12,000.

2nd clr TVM

12,000 FV

6.27/12 = I/Y

24 n

Cpt pv

10,589.18

+ 2,000

12,589.19

Katie’s Kash Only will sell you the car today for $11,463.69.

2nd clr TVM

59 n

204.27 pmt

6.27/12 = I/Y

10 FV

Cpt PV

10,355.61

+ 1,204.27

= $11,559.88

You called the bank and they told you that current interest rates on car purchase is 6.27%. They will finance the car for you, with no money down, for 48 months.

What to do…… What to Do.

Greg’s Great Golash Company is considering buying the following Bonds. Calculate how much they must pay for each to get the interest they desire:

Bond #1- Mollies Mobile Bonds- Face $50,000 payable in interest only payments of 10% for 10 years and then the principal is due. – sold to yield 8%

Bond #2 – Amber’s Applesauce Company bonds, Face is 12,600 payable in 24 equal monthly payments that include interest at 4%. Sold to yield 6.27%

Bond #3 – Collin’s Cooking Company Bonds, zero coupon, 24 month, $12,000 face, sold to yield 6.27% interest.

Bond #4, Meg’s Fair Company Bonds. $100,000 face, 25 year bond, 10% coupon priced to yield 6.27%.

Greg’s Great Golash Company is considering buying the following Bonds. Calculate how much they must pay for each to get the interest they desire:

Bond #1- Mollies Mobile Bonds- Face $50,000 payable in interest only payments of 10% for 10 years and then the principal is due. – sold to yield 8%

2nd clr TVM

.10 X 50,000 = PMT

10 n

50,000 FV

8 I/Y

Cpt PV

56,710.08

Bond #2 – Amber’s Applesauce Company bonds, Face is 12,600 payable in 24 equal monthly payments that include interest at 4%. Sold to yield 6.27%

2nd clr TVM

12,600 PV

24 n

4/12 = I/Y

Cpt PMT

6.27/12 = I/Y

CPT PV

12,311.54

Bond #3 – Collin’s Cooking Company Bonds, zero coupon, 24 month, $12,000 face, sold to yield 6.27% interest.

2nd clr TVM

24 n

6.27/12 = I/Y

12,000 FV

Cpt PV

10,589.18

Bond #4, Meg’s Fair Company Bonds. $100,000 face, 25 year bond, 10% coupon priced to yield 6.27%.

2nd clr TVM

100,000 FV

10,000 PMT

6.27 I/Y

25 n

Cpt PV

146,482.72