Register
Dave Krug finances a new automobile by paying $6,500 cash and agreeing to make 20 monthly payments of $580 each, the first payment to be made one month after the purchase. The loan bears interest at an
222k views
1 vote
Dave Krug finances a new automobile by paying $6,500 cash and agreeing to make 20 monthly payments of $580 each, the first payment to be made one month after the purchase. The loan bears interest at an annual rate of 12%. What is the cost of the automobile? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round PVA factor to 4 decimal places.)

User Albz
by
4.8k points

1 Answer

5 votes

Answer:

$16,966.68

Step-by-step explanation:

the cost of the car = down payment + present value of the monthly installment payments

  • down payment = $6,500
  • PV of monthly installment payments = $580 x 18.046 (PV annuity factor, 1%, 20 periods) = $10,466.68

the cost of the car = $6,500 + $10,466.68 = $16,966.68

User NKn
by
5.4k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.8m questions

7.6m answers

Other Questions

_____ reminds customers and clients that they made a good choice in selecting a company with which to do business, or it reminds them of the good qualities of their purchase.​
On august 1 the darius co. purchased a photocopy machine for $8,000. the estimated annual depreciation on the machine is $1,680. if the company prepares annual financial statements on december 31, the
When president obama was elected, the u.s. economy was in trouble, and has slid into a recession. consumer spending was low and getting worse. in an effort to stop the decline, president obama proposed
Ensuring that an individual is who they claim to be is the function of _____. select one: a. confidentiality b. authorization c. availability d. authentication e. nonrepudiation
The current market price for good y is above the equilibrium price, and then the price of a subsitute good, x, increases. the demand curve for good y shifts as a result. what is the likely outcome of the
Link Copied!