Question 4 ( A)

Osama Ahmed Al Balushi is planning to buy an economic segment car. He visited various showrooms to finalize the best possible deal for himself. He compared with a different brand, their offers, and schemes. He does not want to pay all the price at once, so he is looking for a down payment and installment payment schemes. He has a limited income for this reason he is trying to find a deal with easy installment payment and less interest rate so he can minimize the overall payment and he may get a preferred car under his budget. One day he visited Ford Motor showroom and found one suitable car as he wants to buy. The lease term period is for 5years with the first payment due at the inception of the lease. The quoted annual interest rate is 4% per annual and he must make an additional down payment of OMR 2,500. The schemes also say that the residual value of the vehicle is OMR 5,430 pay back after five years. After much research, he has concluded that, he could buy the car for a total price of OMR 35,800. (include first-year full insurance and Registration fees). Considering the over scenario and schemes calculate the monthly installment he will have to pay every month and prepare 5 years amortization schedule that shows the monthly principal and interest amount with the lease , beginning balance, scheduled payment, principal amount, ending balance, and cumulative interest. (6 Marks)

B. Considering the above scenario, prepare 4 years deprecation schedule that show the yearly deprecation expenses and using following deprecation functions. (4 Marks)

1. Double-declining balance method function
2. Sum-of-the-years'- digits method function
3. Straight Line method function
4. Fixed-declining balance method function