help!! I know this is technically two problems but I ran out of question so please help if you can. I don't have anymore questions left!
also posting problem 1 as an reference but just help to the top 2
As in Problem 1, once again, you are borrowing $6500 to purchase a car. However, now the first payment is due immediately. There will be a total of 36 monthly payments (The first payment occurs immediately. The remaining 35 occur at the end of each of the following months). The advertised interest rate is 9% APR (therefore use a monthly discount rate of r-0.75% in your computations). The payments will all be equal in size HINT: This is an annuity due problem. Make sure you understand the discussion in the book, especially Example 5B - paying attention to Footnote 3 (which applies to Parts B, C, and D). Also work the Annuity Due problems at the end of the chapter before you work this problem Part A) What is the size of the first payment? (which vou pay immediately) Part B)Now assume that the size of the car payments increases by 2% every month. size of the first payment? What is the Part C) Now assume that the size of the car payments decreases by 2% every month. What is the size of the 4th (fourth) payment? Hint: The answer is NOT $259.45 Part D) Now assume that the size of the car payments decrease by 0.75% every month. What is the size of the payment that occurs 15 months from today? Part E) Now assume that the size of the car payments increases by 0.75% every month. What is the size of the payment that occurs 15 months from today? Now repeat Problem 2-B (in which you borrow S6500, make a total of 36 payments with the first payment made immediately, and all payments are growing by 2% per month)-but now use an interest rate of r-000. Then answer the following questions: Part A)What is the size of the 6th (sixth) payment? Hint: The answer is not $140.79 Part B) If you sum up all 36 payments (i.e. just simply add them up, as an accountant might do - what is the sum of all 36 payments? HINT: This is a super easy question (and it's discussed in the book). In fact there is NO NEED for any computation at all! NONE! Do you understand why? You need to. If you don't see the answer in about 3 seconds (at most), then you did not read the book carefully enough. Fix that
