| basic PV | pv & accounting | annuities I | annuities II | Examples: 1 - PV of Note Receivable | 2 - Issuance of Bond | 3: Cash or Note Payable? | 4 A: Buying a car - interest rate? |4 B: Buying a car - payments: | Quizz Practice quizz (from an old text book, but still working)
| Example 4B: Bying a car. Determine the Annual
Payments You could purchase the car for either $30,000 now, or make five payments. If the dealer charges 6% interest, what will be the amount of each payment. Payments are to be made at the end of the year. |
To determine payment amounts:
Obviously, car payments are made monthly, but, once you understand the principle involved, you use a financial calculator or spreadsheet program to calculate the payments, etc. We just don't have tables for (6%/12,60)! NOTE: Example 4 (a) or (b) are useful, when you are trying to decide if an offered deal is a good idea. See Example III. |
Return to: home| | basic PV | pv & accounting | annuities I | annuities II | Examples: 1 - PV of Note Receivable | 2 - Issuance of Bond | 3: Cash or Note Payable? | 4 A: Buying a car - interest rate? |4 B: Buying a car - payments: | Quizz Practice quizz (from an old text book, but still working)