When buying a car, condo, house, or many other long-term assets the lender will

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When buying a car, condo, house, or many other long-term assets the lender will require a down payment. This is an amount of money given to the seller of the asset at the time of the purchase. The down payment provides the lender some comfort that if you don’t make the loan payments the lender will be able to sell the asset and get their money back. The down payment acts as a cushion for the lender.
In order to calculate the amount of the payment:
a) Take the total cost of the car.
b) Subtract the amount of the down payment. This is the amount that you need to borrower to buy the car. It is entered as a negative and pushing the PV button.
c) The interest rate is given. Remember all consumer loans are paid monthly so you need to divide the interest rate by 12 prior to entering it under i. Per annum means the interest rate is an annual rate.
d) The term is the number of years multiplied by 12 because you are paying monthly. This number is entered in under N.
e) The FV is not touched because at the maturity of the car loan you have paid the loan off and you will own the car without any debt on it. The payment will contain the interest plus a portion of the principle you borrowed such that at the maturity of the loan you will have paid all of the amount you borrowed to purchase the car.
f) Press the pmt button to get your answer.
You have now worked six months in the finance department of Pfizer. Your job analyzing and preparing budgets for the drug discovery unit has been interesting and fulfilling. You are both learning new things and your boss has told you that you will be in line for a promotion within 12 months. The steady paycheck has been great and now it is time to get rid of that old Mitsubishi and get a new car.
You have decided to purchase a BMW 320i and have gotten the following quotes from local car dealers. The price of the car is $32,500.00
BMW Escondido
$3,500 down and a rate of 1.5% per annum for 36 months.
Mossy BMW Vista
$5,000 down and a rate of 4% per annum for 48 months.
San Diego BMW
$2,500 down and a rate of 1.0% per annum for 30 months
South Bay BMW
$7,500 down and a rate of 5% for 60 months
Since you have never borrowed any money before, except for student loans, you want to minimize your monthly payment. Given the fact that your sole decision criterion is to have the lowest monthly payment which dealership should you purchase the car from?

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