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Assume that you are buying a new car. you believe you could afford to make...

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Accounting

Assume that you are buying a new car. you believe you could afford to make monthly loan payments, at the end of each month, of no more than $650 / month for 60 months at a monthly interest rate 1% per month

1- What would be the amount of the loan (hint: Present Value) that the bank would be willing to make to you?

2- What would be the total amount paid to the bank over the 60 months?

3- How much interest will the bank earn over the 60 months period?

4- In addition to the amount that you can borrow from the bank, you believe you can also afford to make a down payment of $5,000 from your savings account at the time the car is purchased. What would be the maximum price for a new car that you could plan on buying?

Please show all the calculations.

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