Assume a car costs $30,000, you put 20% down, and borrow for 5 years at 4%. What is the total amount borrowed and the monthly payment? What is the payment if you stretch the loan to 6 years?

Assume a car costs $25,000, you put 15% down, and borrow for 4 years at 3%. What is the total amount borrowed and the monthly payment?

What is the expected value of a $24,000 car after 3 years?

Pick a car you are familiar with and give a rough idea of new car price, and the price of a three year used version of the car. Try to find the price of a six year used version.

As a very rough rule, assume a car declines by half after three years (it may only be 40-45%). Assume you lease a $24,000 car for three years with no money down. What is the rough monthly payment?

What do you say to your friend that says leasing is the way to go since the payments are less than a car loan?

What is the rough increase in your three year lease monthly payment if you upgrade the sound system to the version that costs an extra $720?

If a dealer advertises a $300 monthly lease for 36 months, plus $4,000 upfront, how much will you pay in total?

If you buy a new car and change your mind a day later, will you receive a full refund? Assume nothing is wrong with the car.

For this problem you can ignore taxes. Assume a car costs $28,000 today and you expect to be able to sell it in 6 six years for $8,000. You also can assume the car will be under warranty for the full six years. Alternatively, you can lease a car for 3 years for $400 per month, and expect to be able to then lease another car for the following 3 years, also at $400 per month. Ignoring interest rates and discounting, which alternative is more costly? Now, assume interest rates are 4%. What are the present values of the two alternatives? Which is more costly?

What is the monthly payment on a $40,000 5-year car loan with a 6% rate? What about if you negotiated a $3,000 discount on the sticker price?