Kenny and Jannah want to purchase a car so that Kenny doesnt have to take the bus up their local mountain where Kenny works as a ski shop manager in the winter and a mountain bike shop manager in the summer. Jannah, who drives for Lyft, already owns a 2010 PT Cruiser. Kenny complains that the mildewy bus is cold and gross. For the past six years they have been able to put $50 each month into a savings account with an APR of 1.8%.

a) (8 points) How much do Kenny and Jannah have saved toward a down payment? Indicate which formula you use and identify all of the relevant variables (A, P, APR, n, Y, and/or PMT). Kenny and Jannah qualify for a 6-year car loan with a 9.8% APR and a 3-year car loan with an 7.6% APR. They found a new 2019 Ford F250 Superduty listed at $39,900. Their combined monthly income is $6100 during ski season, but they know that will drop in the summer. They know they shouldnt pay more than 10% of their income on car payments.

b) (10 points) Assuming Kenny and Jannah make the downpayment from part (a) and will make payments for the entire life of the loan, how much will they pay monthly for each loan option? Are either of these options within 10% of their monthly income? Indicate which formula you use and identify all of the relevant variables (A, P, APR, n, Y, and/or PMT).

c) (8 points) Assuming Kenny and Jannah will make payments for the entire life of the loan, how much will they pay in total for the F250 with each loan option? Kenny has been competing in Ski Ballet, and recently won the national championships. Now, he wants to use the prize money ($5555) to make a larger down payment.

d) (8 points) If Kenny and Jannah decide to put the prize money toward their down payment, how will this affect the amount they would pay each month for each loan option (i.e. how much money would it save them each month for each option)? Indicate which formula you use and identify all of the relevant variables (A, P, APR, n, Y, and/or PMT). Kenny realizes that he totally forgot about a credit card that he made some charges to a few months back. He checks the balance and sees that it has gone all the way up to about $4790 (charges, interest, late fees). Because of his late payments, the APR on the card is now at 30.98%. Further, the minimum payment on the card is now $125 every month.

e) Considering that the current balance of the card is $4790 and the APR is 30.98%: (6 points) Calculate the monthly percentage rate and determine how much of the first $125 minimum payment will go towards interest and how much will go towards reducing the balance on the card. (4 points) Based on your answer to part (i), is it a good idea to only make the required monthly payments on this card or should Kenny pay the card off more quickly? Justify your response using quantities and in complete sentences. Jannah is correctly concerned and commands Kenny to take care of this considerable credit card catastrophe. Kenny believes they could probably still afford the truck while making minimum payments on the card.

f) (6 points) Calculating and stating any other quantities you believe are important, make a recommendation for Kenny and Jannah regarding the purchase of a truck and getting out of credit card debt (Justify your recommendation with quantities and with complete sentences). Address any features you believe are significant and feel free to come up with suggestions that have not been identified in this document. For example, which option(s) allow them to save the most money? Which loan offer from their bank can they afford? Should they pay off the credit card debt all at once? Should they consider purchasing a different vehicle? Should they forget about getting another vehicle altogether?