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lana66690 [7]
2 years ago
12

You want to buy a new sports coupe for $74,500, and the finance office at the dealership has quoted you a loan with an APR of 6.

9 percent for 36 months to buy the car.
Required:
a. What will your monthly payments be?
b. What is the effective annual rate on this loan?
Business
1 answer:
Pachacha [2.7K]2 years ago
5 0

Answer:

a) Monthly payments = $22,969.38

b) Effective rate of return= 7.12%

Explanation:

<em>Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest. </em>

The monthly installment is computed as follows:  

Monthly installment= Loan amount/annuity factor

Loan amount; = 74,500

Annuity factor = (1 - (1+r)^(-n))/r

r -monthly rate of interest, n- number of months

r- 6.9%/12 = 0.575 % = 0.00575, n = 36 =

Annuity factor = ( 1- (1+00575)^(-36)/0.00575= 32.434

Monthly installment = Loan amount /annuity factor

=  74,500/32.434= 22,969.38

Required monthly payments = $22,969.38

Effective annual interest rate

Effective rate of return = ((1+r)^n- 1) × 100

where r - monthly interest rate- 6.9%/12 = 0.575%

n- number of months= 12 months

Effective rate of return - (1+00575)^(12) - 1× 100=  7.12%

Effective rate of return= 7.12%

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Answer:

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4 0
3 years ago
Suppose the U.S. foreign assets are 67 percent of the U.S.​ GDP, and the U.S. foreign liabilities are 95 percent of the U.S. GDP
mezya [45]

Answer:

8.58% of US GDP is the answer for the required question.

Explanation:

US Foreign Assets = 67% of US GDP

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66% of US Foreign Assets = Foreign Currencies

All Liabilities to Foreigners = US Dollars.

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Solution:

Consider the following formula for this problem:

Change in external wealth in US dollar = (Change in foreign assets in dollars) - (Change in foreign liabilities in US dollars)

Liabilities are already denominated in dollars in our instance, but assets are not. As a result, we'll use the formula above to calculate the dollar value of the foreign assets. However, because the dollar value of net external assets fluctuates, we must also consider the rate of depreciation.

Change in dollar value of foreign currency denominated asset = rate of depreciation x Share of the foreign currency

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Hence,

8.58% of US GDP is the answer for the required question.

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Answer:

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