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please answwe all parts thanks. 6. (10 points) You are considering leasing a car. You notice an ad that says you can lease the car
please answwe all parts thanks.
6. (10 points) You are considering leasing a car. You notice an ad that says you can lease the car you want for $477.00 per month. The lease term is 60 months with the first payment due at inception of the lease. You must also make an additional down payment of $2,370. The ad also says that the residual value of the vehicle is $20,430. After much research, you have concluded that you could buy the car for a total "driveout" price of $33,800. What is the quoted annual interest rate you will pay with the lease? 7. (10 points) You are planning for retirement 34 years from now. You plan to invest $4,200 per year for the first 7 years, 86,900 per year for the next 11 years, and $14,500 per year for the following 16 years (assume all cash flows occur at the end of each year). If you believe you will eam an effective annual rate of retum of 9.7%, what will your retirement investment be worth 34 years from now? 8. (10 points) John and Peggy recently bought a house. They financed the house with a $125,000, 30-year mortgage with a nominal interest rate of 7 percent. Mortgage payments are made at the end of each month. What total dollar amount of their mortgage payments during the first three years will go towards repayment of principal? 9. (10 points) You have just won the Nebraska Lottery with a jackpot of $11,000,000. Your winnings will be paid to you in 26 equal annual installments with the first payment made immediately. If you had the money now, you could invest it in an account with a quoted annual interest rate of 9% with monthly compounding of interest. What is the present value of the stream of payments you will receive? 10. (10 points) You buy a refrigerator for $800 but you don't have to make the payment until next year (that is, one year later). The opportunity cost of money is 3% What price are you paying for the refrigerator in present dollars? You can defer payment on the refrigerator for an additional year. What is the equivalent current price of the refrigerator? If interest rates were 20% and you can pay for the refrigerator in two years, what is the equivalent current price Step by Step Solution
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