Problem 2

A person bought a car with a loan of $35,000 two years ago, with monthly payments for four years and EAIR of 3.25%. Now the person is transferred from Brooklyn to Hawaii, effective within a month. She is interested in knowing the current market value of her car due to depreciation, and the contractual and market value of her loan. Due to the general financial situation, the EAIR is now 4.725%. If she would like to ship the car to Hawaii, the cost will be $5,000. What is the financial situation that she is facing with her car and what is your suggestion to her?

DIRECTIONS

You work for these two problems using EXCEL. You use one excel file with two sheets, one for each problem. After you complete your calculations, you provide your report in a WORD document. In your work document you explain clearly your work performed in EXCEL. Then you explain your suggestions. It would be helpful to include in your WORD document graphs presenting numerical analyses that were performed in EXCEL. Be clear, detailed, and professional.

Explain the financial concepts that your utilize for your analysis. Provide your work in EXCEL with ALL possible options that can be calculated. Explain the financial and mathematical formulas you use, as well as the EXCEL financial formulas.