USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING THREE QUESTIONS Vito Scaletta just bought his dream car,...

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USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING THREEQUESTIONS
Vito Scaletta just bought his dream car, 2019 Aston Martin DB9that cost $208,700. He paid $30,000 down and financed the balanceover 84 months at 6.25% p.a. (Assume that Vito makes all requiredpayments on time).
29. What will the balance on Vito’s loan be at the end of thefourth year (that is, immediately after Vito makes his 48th paymenton the loan)?
30. What is the total amount of interest that Vito will pay overthe entire term of the loan (that is, the total amount of interestthat is paid on payments 1 through 84)?
31. Today is your 30th birthday and you have a dream of retiringon your 65th birthday. You want to put aside however much isnecessary on your 31st through 65th birthdays (35 annual payments)to have enough to retire. You've estimated that you will live untilyou are 90 and you want the first withdrawal to occur on your 66thbirthday, with the last payment occurring on your 90th birthday.You think that you will need $150,000 per year to spend duringretirement. You estimate constant interest rates of 11.25%.Assuming that you currently have $7,500 deposited in yourretirement account, how much must you put aside each year in orderto have sufficient money to retire at age 65?
32. Gordon Freeman recently invested $5,000 in a project that ispromising to return 6.5 percent per year. The cash flows areexpected to be as follows: End of Cash Y ear Flow 1 $1000 2 950 3875 4 ??? 5 850 Note that the 4th year cash flow is unknown.Assuming the present value of this cash flow stream is $5,000 (thatis, CF0 = -5000), what is the missing cash flow value (that is,what is the cash flow at the end of the 4th year)?
33. You have a $25,000 balance on your credit card. You plan tomake monthly payments of $450 until the balance is paid off. Theinterest rate on your credit card is 17.5% p.a., compoundedmonthly. A letter in the mail informs you that you are approved fora new credit card and balance transfers are subject to a 9.5% p.a.,compounded monthly. How many months sooner will you pay off yourbill?

Answer & Explanation Solved by verified expert

4.2 Ratings (861 Votes)

Based of the above given data I calculated the entire EMI table for the required information Anyway I used excel sheet for the EMI calculation Formula for calculating EMI is PMTratenperpv whereas rate rate of interest if given in per annum then convert it into per months by dividing it with 12 months Nper number of months over the payment is due or total tenure of the loan pv total loan amount Formula for calculating principle payment PPMTrate per nper pv whereas rate rate of interest if given in per annum then convert it into per months by dividing it with 12 months nper number of months over the payment is due or total tenure of the loan per payment of principle of that particular month Pv total loan amount So the data derived from the above given question is Total Value 208700 Down Payment 30000 Loan Amount 178700 Rate of interest 625 Pa Tenure 84 months EMI 2632 by using PMT formula EMI Table Months Payment Principle Interest Beginning Balance Ending Balance 1 263202 170129 93073 178700 176999 2 263202 171015 92187 176999 175289 3 263202 171906 91296 175289 173570 4 263202 172801 90401 173570 171841 5 263202 173701 89501 171841 170104 6 263202 174606 88596 170104 168358 7 263202 175515 87687 168358 166603 8 263202 176429 86773 166603 164839 9 263202 See Answer

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USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING THREEQUESTIONSVito Scaletta just bought his dream car, 2019 Aston Martin DB9that cost $208,700. He paid $30,000 down and financed the balanceover 84 months at 6.25% p.a. (Assume that Vito makes all requiredpayments on time).29. What will the balance on Vito’s loan be at the end of thefourth year (that is, immediately after Vito makes his 48th paymenton the loan)?30. What is the total amount of interest that Vito will pay overthe entire term of the loan (that is, the total amount of interestthat is paid on payments 1 through 84)?31. Today is your 30th birthday and you have a dream of retiringon your 65th birthday. You want to put aside however much isnecessary on your 31st through 65th birthdays (35 annual payments)to have enough to retire. You've estimated that you will live untilyou are 90 and you want the first withdrawal to occur on your 66thbirthday, with the last payment occurring on your 90th birthday.You think that you will need $150,000 per year to spend duringretirement. You estimate constant interest rates of 11.25%.Assuming that you currently have $7,500 deposited in yourretirement account, how much must you put aside each year in orderto have sufficient money to retire at age 65?32. Gordon Freeman recently invested $5,000 in a project that ispromising to return 6.5 percent per year. The cash flows areexpected to be as follows: End of Cash Y ear Flow 1 $1000 2 950 3875 4 ??? 5 850 Note that the 4th year cash flow is unknown.Assuming the present value of this cash flow stream is $5,000 (thatis, CF0 = -5000), what is the missing cash flow value (that is,what is the cash flow at the end of the 4th year)?33. You have a $25,000 balance on your credit card. You plan tomake monthly payments of $450 until the balance is paid off. Theinterest rate on your credit card is 17.5% p.a., compoundedmonthly. A letter in the mail informs you that you are approved fora new credit card and balance transfers are subject to a 9.5% p.a.,compounded monthly. How many months sooner will you pay off yourbill?