Unit 4 Assignment.docx

Unit 4 Assignment.docx - Running Head FINANCING A CAR 1...

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Running Head: FINANCING A CAR 1 Financing a Car Brandon Hedrick Kaplan University November 10, 2017
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FINANCING A CAR 2 Calculation and Discussion The intended car will cost $ 31700 less the initial down payment of $ 2900. The amount to be paid for the car is $ 28800 in installments. To fully compute the price of the car using the short-term method the installments payable in the 48 months will be added to the down payment 48 ( 732.29 ) + 2900 = $ 38049.92 The total price of the car for the period will be $ 38049.92. To compute the total finance charge that will be paid over the life of the loan, we will deduct the cash price from the total installment price of the vehicle. 38049.92 31700 = $ 6349.92 The total finance charge that will be paid for the life of the loan will be $ 6349.92. Comparing and Contrasting the advantages of paying Cash and short-term The short-term will entail the obtaining of cash from the financial institution which will be paid within a short time, i.e., a year or less. This financing method like cash is faster and flexible as will provide the company with the required capital to buy the vehicle. The difference
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