USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING THREE QUESTIONSVito Scalettajust bought his dream car, a 2020Bugatti Divo, thatcost $5,808,215. He paid $500,000downand financed the
USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING THREE QUESTIONSVito Scalettajust bought his dream car, a 2020Bugatti Divo, thatcost $5,808,215. He paid $500,000downand financed the balance over 84 months at 4.25% p.a. (Assume that Vitomakes all required payments on time).
41.What is the monthly payment on Vito'sloan?
42.What will the balance on Vito'sloan be at theend of the fourthyear(that is, immediately after Vitomakes his48thpayment on the loan)?
43.What isthe total amount of interest that Vitowill pay over the entire term of the loan(that is, the total amount of interest that is paid on payments 1 through 84)?
44.Today is your 25thbirthday and you have a dream of retiring on your 65thbirthday. You want to put asidehowevermuchisnecessaryonyour 31stthrough 65thbirthdays(35annual payments)tohave enough to retire. You've estimated that you will live until you are 90 and you want the first withdrawal to occur on your 66thbirthday, with the last payment occurring on your 90thbirthday. You think that youwillneed$175,000peryeartospendduringretirement.Youestimateconstantinterestratesof 10.25%. Assuming that you currently have $10,000deposited in your retirement account, how much must you put aside each year in order to have sufficient money to retire at age 65?
45.Daigo Dojima recently invested $5,500in a project that is promising to return 2.25percent per year. The cash flows are expected to be as follows:
End of CashYearFlow1/$10002/95033/8754/???5/850
Note that the 4thyear cash flow is unknown. Assuming the present value of this cash flow stream is $7,500(that is, CF0 = -7500), what is the missing cash flow value (that is, what is the cash flow at the end of the 4thyear)?
USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING THREE QUESTIONSVito Scalettajust bought his dream car, a 2020Bugatti Divo, thatcost $5,808,215. He paid $500,000downand financed the balance over 84 months at 4.25% pa. (Assume that Vitomakes all required payments on time). 41.What is the monthly payment on Vito'sloan? 42.What will the balance on Vito'sloan be at theend of the fourthyear(that is, immediately after Vitomakes his48thpayment on the loan)? 43.What isthe total amount of interest that Vitowill pay over the entire term of the loan(that is, the total amount of interest that is paid on payments 1 through 84)? 44.Today is your 25thbirthday and you have a dream of retiring on your 65thbirthday. You want to put aside however much is necessary on your 31stthrough 65thbirthdays (35annual payments) to have enough to retire. You've estimated that you will live until you are 90 and you want the first withdrawal to occur on your 66thbirthday, with the last payment occurring on your 90thbirthday. You think that you will need $175,000 per year to spend during retirement. You estimate constant interest rates of 10.25%. Assuming that you currently have $10,000deposited in your retirement account, how much must you put aside each year in order to have sufficient money to retire at age 65? 45.Daigo Dojima recently invested $5,500in a project that is promising to return 2.25percent per year. The cash flows are expected to be as follows: End of CashYearFIow 1/$1000 2/9503 3/875 4/??? 5/850 Note that the 4thyear cash flow is unknown. Assuming the present value of this cash flow stream is $7,500(that is, CFO = -7500), what is the missing cash flow value (that is, what is the cash flow at the end of the 4thyear)? USE THE INFORMATION BELOW TO ANSWER THE FOLLOWING THREE QUESTIONS Vito Scaletta just bought his dream car, a 2020 Bugatti Diva, that cost $5,808,215. He paid $500,000 down and nanced the balance over 84 months at 4.25% pa. (Assume that Vito makes all required payments on time). 41. What is the monthly payment on Vito's loan? 42. What will the balance on Vilo's loan be at the end of the fourth year (that is, immediately aer Vito makes his 48'\" payment on the loan)? 43. What is the total amount nfinterest that Vito will pay over the entire term oflhe loan (that is, the total amount of interest that is paid on payments 1 through 84)? 44. Today is your 25'h birthday and you have a dream of retiring on your 65'h birthday. You want to put aside however much is necessary on your 31" through 65'" birthdays (35 annual payments) to have enough to retire. You've estimated that you will live until you are 90 and you want the rst withdrawal to occur on your 66'\" birthday. with the last payment occurring on your 90'h birthday. You think that you will need 3175.000 per year to spend during retirement. You estimate constant interest rates of 10.25%. Assuming that you currently have 310,000 deposited in your retirement account. how much must you put aside each year in order to have sufcient money to retire at age 65? 45. Daigo Dojima recently invested $5,500 in a project that is promising to retum 2.25 percent per year. The cash ows are expected to be as follows: End of Cash Year m 1 $1000 2 950 3 875 4 7?? 5 850 Note that the 4'" year cash ow is unknown Assuming the present value of this cash ow stream is $7,500 (that is, CFO : -7500), what is the missing cash ow value (that is, what is the cash ow at the end of the 4'\" year)
