Problem_Set__1_Checkpoints

Problem_Set__1_Checkpoints - BusM 401 Problem Set #1...

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BusM 401 Problem Set #1 Checkpoints Review of Financial Functions Note: These checkpoints are short answers intended to help you check your work as you go along. They are not full solutions, which will be posted on Blackboard after the problem set is turned in. Remember that to get full credit for problem sets you must show all your work, and the answers listed here are usually not sufficient responses to the questions. 1. You are buying a new minivan for $22,000. You will finance the purchase over 4 years making monthly payments, and you won’t pay off the loan early. You are putting $0 down. The dealer offers you two deals. The first deal is a $2,000 up-front rebate and 6.9% financing. The second deal is no rebate and special 1.9% financing. Which deal do you take? For deal 1, PMT = $478.00 2. You borrowed $100,000 and you wish to repay the loan by paying $10,000 a year. How many years will it take you to repay the loan if the annual interest rate is 8%? How does your answer change if the annual interest rate is 10%?
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Problem_Set__1_Checkpoints - BusM 401 Problem Set #1...

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