HomeworkLib
Question

Question text Joey buys a new Honda civic for $19410. He agrees to payments at the...

Question text

Joey buys a new Honda civic for $19410. He agrees to payments at the end of every month for 7 years. If interest is 5% compounded quarterly, what are Joey's payments?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Given interest rate is 5% compounded quarterly i.e 1.25% per quarter. First we need to find equivalent rate compounded monthly. We know, monthly compounded should be equal to quarterly rate.

i.e 1.25 = 1(1+x%)^3

x= 0.415%

Now we find the annuity payments using present value formula

We know, Present Value = Annuity (P/F, 0.415%, 84 intervals)

19410 = Annuity * 70.7989

Annuity = $274.16

0 0
Add a comment
Know the answer?
Add Answer to:
Question text Joey buys a new Honda civic for $19410. He agrees to payments at the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Joey buys a new Honda civic for $19410. He agrees to payments at the end of...

    Joey buys a new Honda civic for $19410. He agrees to payments at the end of every month for 7 years. If interest is 5% compounded quarterly, what are Joey's payments?

  • 1. Shirley wants to go on a trip to Hawaii. She budgets that she can save...

    1. Shirley wants to go on a trip to Hawaii. She budgets that she can save $108 at the end of every month, and interest in her account is 8% compounded biweekly. By looking at prices, she knows that the trip will cost her $4813 total. How long in years (round to two decimal places) will it take before she can go on her trip? 2. Joey buys a new Honda civic for $18997. He agrees to payments at the...

  • Fritz Benjamin buys a car costing ​ $7900. He agrees to make payments at the end...

    Fritz Benjamin buys a car costing ​ $7900. He agrees to make payments at the end of each monthly period for 7 years. He pays 4.8​% interest, compounded monthly. ​(a) What is the amount of each​ payment? ​(b) Find the total amount of interest Fritz will pay.

  • Fritz Benjamin buys a car costing $20300. He agrees to make payments at the end of...

    Fritz Benjamin buys a car costing $20300. He agrees to make payments at the end of each monthly period for 5 years. He pays 8.4% interest, compounded monthly. What is the amount of each payment? Find the total amount of interest Fritz will pay.

  • Fritz's monthly payment is $ Fritz Benjamin buys a car costing $22300. He agrees to make...

    Fritz's monthly payment is $ Fritz Benjamin buys a car costing $22300. He agrees to make payments at the end of each monthly period for 8 years. He pays 10.8% interest, compounded monthly. What is the amount of each payment? Find the total amount of interest Fritz will pay (Round to the nearest cent.)

  • Raj Krishnan bought a Honda Civic for $17,345. He put down $6,000 and financed the rest...

    Raj Krishnan bought a Honda Civic for $17,345. He put down $6,000 and financed the rest through the dealer at an APR of 7.95 percent for four years. What is the effective annual interest rate (EAR) if the loan payments are made monthly? (Round answer to 0 decimal places, e.g. 15%.) Effective Annual interest rate %

  • 10. The MSRP of a new Honda Civic is $21.500. Kate has decided to lease the...

    10. The MSRP of a new Honda Civic is $21.500. Kate has decided to lease the car over 4 years. She will make a down payment of $3,000, monthly payments of $265 and a residual payout at the end of the lease. Calculate the amount of the residual payment using a rate of j12=3%.

  • Question 4 The value of a 7 year lease that requires payments of $750 made at...

    Question 4 The value of a 7 year lease that requires payments of $750 made at the beginning of every month is $60,800. What is the nominal interest rate compounded monthly? % Round to two decimal places You invested $8,500 at the end of each quarter for 6 years in an investment fund. At the end of year 6, if the balance in the fund was $224,000, what was the nominal interest rate compounded quarterly? Round to two decimal places

  • Amortization schedule with periodic payments. Moulton Motors is advertising the following deal on a new Honda...

    Amortization schedule with periodic payments. Moulton Motors is advertising the following deal on a new Honda Civic: "Monthly payments of $400.40 for the next 60 months and this beauty can be yours!" The sticker price of the car is $18,000. If you bought the car, what interest rate would you be paying in both APR and EAR terms? What is the amortization schedule of the first six payments? If you bought the car, what monthly interest rate would you be...

  • John buys a new solar power energy grid worth $607,463 for his company's warehouse. The contract...

    John buys a new solar power energy grid worth $607,463 for his company's warehouse. The contract stipulates payments will use a nominal interest rate of 10.7% compounded monthly for 41 months. John agrees to pay $ 87 as down payment on the condition that the first payment will not be until the start of the 10 month if he pays interest on the current balance until he begins payments. Determine the monthly payments.

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT