Dean Is Planning To Purchase A Car For 28,560 With No Down P

Question

dean Is Planning To Purchase A Car For 28560 With No Down Payment Dean is planning to purchase a car for $28,560, with no down payment. Assuming Dean qualifies for a 5-year loan at an interest rate of 2.9%, determine the monthly payment amount. Round to the nearest cent. Calculate the total amount Dean will pay for the car over the life of the loan, and determine the total interest paid to the creditor. If Dean decides to save the money equivalent to his monthly payment instead of buying immediately, deposited into an account earning 1.5% annually for 5 years, compute how much he will have saved at the end of this period. Discuss whether Dean should buy the car now or wait, considering the advantages and disadvantages of each option, supported by factual reasoning. Present at least five sentences with proper grammar. Simon spends $4.72 on a coffee every weekday, Monday through Friday, at Sunbucks Coffeehouse, not visiting on weekends. Calculate his weekly spending and then his annual expenditure, assuming he goes every week. Instead of purchasing coffee daily, Simon stops and invests the amount he would have spent yearly into a monthly savings plan. Determine his monthly investment, rounding to the nearest cent. Calculate how much he would have saved by retirement at age 65, assuming an investment yield of 1.2%, using the savings plan formula. Fill in the chart with these results. Reflect on whether these savings outcomes surprise you and suggest another personal habit change that could save money, relevant to your situation. Provide at least five substantive sentences and support your reasoning with facts, using proper grammar.

Dr. Jack HW Helper · Accepted Answer

Financial literacy and effective money management are essential for making informed decisions that benefit long-term financial stability. This paper explores various scenarios involving loans, savings, and the evaluation of costs associated with everyday expenses, illustrating key principles of personal finance. Car Purchase and Loan Calculations Dean’s decision to purchase a car priced at $28,560 without a down payment involves understanding the mechanics of amortized loans. Using the formula for monthly payments on an installment loan, the calculation involves the principal amount, interest rate, and loan duration. The formula employed is: $ P = \frac{r \times PV}{1 - (1 + r)^{-n}} $ where $ PV $ is the loan amount, $ r $ is the monthly interest rate, and $ n $ is the total number of payments. Converting the annual rate to a monthly rate gives $ r = \frac{2.9\%}{12} = 0.002417 $, with $ n = 5 \times 12 = 60 $. Substituting the values yields a monthly payment of approximately $512.33. The total amount paid over five years is $ 512.33 \times 60 = \$30,739.80 $. The total interest paid is the difference between the total paid and the original price: \$30,739.80 - \$28,560 = \$2,179.80. These calculations reveal the cost of financing and help Dean understand the true expense of the purchase. Savings Analysis If Dean chooses to postpone buying the car and instead deposits his monthly payment of $512.33 into an account earning 1.5% annually for 5 years, we can determine his accumulated savings using the future value formula of an ordinary annuity: $ FV = P \times \frac{(1 + r)^n - 1}{r} $ where $ P = 512.33 $, $ r = \frac{1.5\%}{12} ≈ 0.00125 $, and $ n = 60 $. Plugging in the numbers results in a savings of approximately \$32,698.50 at the end of 5 years. This illustrates the power of disciplined saving and compound interest, though it remains less than the car’s purchase price, highlighting the trade-offs between immediate purchase and delayed sa

Dean Is Planning To Purchase A Car For 28,560 With No Down P

dean Is Planning To Purchase A Car For 28560 With No Down Payment

Paper For Above instruction

Car Purchase and Loan Calculations

Savings Analysis

Decision Analysis

Simon’s Coffee Spending and Savings

Implications and Personal Reflection

References