Top Posters
Since Sunday
a
5
k
5
c
5
B
5
l
5
C
4
s
4
a
4
t
4
i
4
r
4
r
4
New Topic  
hellokidbye hellokidbye
wrote...
Posts: 135
Rep: 0 0
A month ago
Kangaroo Motors has a used car for sale at $4,300, which you want to buy for driving to school. Your parents are willing to lend you the money and charge only 3.60 % APR compounded monthly. They want the loan repaid in equal payment over 48 months, with the first payment due at the end of the month in which you buy the car. You estimate that the monthly cost of operating the car, including gas, insurance, maintenance, and licence fees, will be $160 and payable at the start of each month. The cost of a monthly bus pass is $95. You expect that the car will be totally worn out in four years, with zero resale value, when you are finished school. Your discount rate is 5% EAR, compounded annually.
a) What is the monthly interest rate on the parents' car loan?
b) What is the monthly car repayment?
c) What is the monthly opportunity cost of funds?
d) What is the present value of the car costs?
e ) If you have three roommates who also need transportation to and from school, how much do you and your roommates each need to pay a month in order to cover all your costs?
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
Author:
Read 40 times
1 Reply
Replies
Answer verified by a subject expert
AdieMichelleAdieMichelle
wrote...
Posts: 126
Rep: 2 0
A month ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
This verified answer contains over 810 words.
1

Related Topics

hellokidbye Author
wrote...

A month ago
Brilliant
wrote...

Yesterday
This site is awesome
wrote...

2 hours ago
Smart ... Thanks!
New Topic      
Explore
Post your homework questions and get free online help from our incredible volunteers
  702 People Browsing
 123 Signed Up Today
Related Images
  
 1851
  
 811
  
 281
Your Opinion
What's your favorite funny biology word?
Votes: 328

Previous poll results: What's your favorite coffee beverage?