Question
Please solve using excel functions with explanation Question 1: Compounding Dr. Zoidberg decided to buy a 2019 Tesla Model S P100D Hatchback for $130,000. After
Please solve using excel functions with explanation
Question 1: Compounding
Dr. Zoidberg decided to buy a 2019 Tesla Model S P100D Hatchback for $130,000. After paying a down payment and taxes, Dr. Zoidberg can finance the rest of the purchase price with a loan of 100,000 for 5 years at a promotional finance rate of 3% APR compounded quarterly. Please answer the following questions:
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What is the effecting annual rate changed on this loan?
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What would be the quarterly payment on this loan?
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Dr. Zoidberg also discovers that instead of the special promotional rate he can make
an additional down payment of $20,000 that would lower his loan amount accordingly (i.e. by $20,000). At what APR would Dr. Zoidberg have the same quarterly payment with this option as with the initial promotional rate of 3%?
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Dr. Zoidberg finds that he can get 1.5% APR if he elects option (c). What will his quarterly payment be under this option?
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Now assume that that payment frequency changes to annual, preserving the same EAR. What is his payment now?
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