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hellokidbye hellokidbye
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8 months 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
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AdieMichelleAdieMichelle
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8 months ago
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This site is awesome
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this is exactly what I needed
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