1. You just purchase a used, worn-down car for $8,000 and would like to immediately...
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1. You just purchase a used, worn-down car for $8,000 and would like to immediately begin saving for your next year. You figure you will get 8 years out of this car. You would like to spend $15,000 on your next used car. If car inflation will be 1% and your cash interest rate will be 2.0%, how much do you need to save per month?
$2,332
$240
$150
$2,318
2.
Your car just broke down for the last time and you need to replace your car. You work your budget so that you can afford to spend $550 per month on a monthly car payment. Assuming the loan period is 36 months, lease rate is 5.2%, and the car will have a residual value of $6,500 at the end of the loan, what is the highest car value you can afford? Hint: loan payments are always made at the beginning of the month.
$22,399
$24,775
$20,074
$23,939
3.
You find you dream home in Boise, Idaho. Putting down a 20% down payment today would cost about $40,000. If you wanted to save for 10 years, how much per month would you need to save if you could earn 5.0% on your savings and home prices would go up by 3.0% per year?
$246
$212
$301
$289
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