Question

please answer all of the following questions

USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING THREE QUESTIONS Vito Scaletta just bought his dream car, 2017 Aston Martin DB9 Carbon Edition, that cost $215,000. He paid $50,000 down and financed the balance over 84 months at 6.25% p.a. (Assume that Vito makes all required payments on time). 28. What is the monthly payment on Vito's loan? 29. What will the balance on Vito's loan be at the end of the fourth year (that is, immediately after Vito makes his 48th payment on the loan)? 30. What is the total amount of interest that Vito will pay over the entire term of the loan (that is, the total amount of interest that is paid on payments 1 through 84)?

Answer 1

28

PVOrdinary Annuity = C*[(1-(1+i/100)^(-n))/(i/100)]

C = Cash flow per period

i = interest rate

n = number of payments

165000= Cash Flow*((1-(1+ 6.25/1200)^(-7*12))/(6.25/1200))

Cash Flow = 2430.24

29

PVOrdinary Annuity = C*[(1-(1+i/100)^(-n))/(i/100)]

C = Cash flow per period

i = interest rate

n = number of payments

PV= 2430.24*((1-(1+ 6.25/1200)^(-3*12))/(6.25/1200))

PV = 79587.78

30

total payment=Monthly payment*number of Month

=2430.2355*84

=204139.782

Total interest paid= total payment-period 1 beginning balance

=204139.782-165000

=39139.782