Using the textbook and other resources such as the internet and library, you will examine the topic of loans and mortgages. After researching materials, address the following:
1.Go to your favorite car dealer and select any new automobile that you would like to own. List the type of car (i.e. make, model, and added options, if applicable). For the car, find the price.
2.Assume you have $1000 for a down payment. Using a payment calculator online, calculate the monthly payment for the car assuming you can borrow at 8% APR for five years. In addition, compute the total amount of payback for the car.
3.Select a home you would like to own and find the price. Give a description of thehome including the number of bedrooms/bathrooms, square footage, year built, location, etc. Compute the monthly mortgage payments (dont worry about escrow tax and insurance accounts yet). Use an annual percentage rate of 7% (fixed) for thirty years. Compute the total amount of payback.
4.Assume that the length of the loan was now fifteen years. Compute the monthly payment and the total amount of payback.
5.Suppose you only make $50,000 a year and your monthly expenses account for 1/3 of your annual salary. With the remaining balance, find a car and a home that you can afford. Use the following criteria to determine your monthly car and monthly mortgage payments: Car, 7.5% APR for 4 years; Home, 6% APR for 30 years. (Note: You dont have to use all of the remaining balance.) Provide examples of the car and home. Remember to give information about the car and home including price.