Interests and loans Assignment help.

Interests and loans assignment help.

Answer: interests and loans

  1. Calculate and Discuss the Amount Financed, the Installment Price of the New Car, and the Finance Charges You Will Pay Over the Life of the Loan.

The price (P) of the car is $ 23,500. The down payment (DP) is $ 1,200 and the monthly payment to be made in 48 months is $ 551.4 each month. The sales tax is 7 % of the car’s price (23,500*7 %) which is $ 1,645. To calculate the amount to be finance(ATF), we subtract the down payment from the price of the car, therefore ATF= ((P+T)-DP) = (23,500+ 1645)- 1200= $ 23,945.

The installment price is the addition of all the monthly installments, which can also be calculated by multiplying the monthly installments by the number of installments and the addition of the down payment to the result. Hence, the price will be (551.44 * 48) + 1200 = $27,669.12.

The finance charges (FC) to be paid over the loan period is the difference between the installment price and the amount financed (27,669.12- 23,945) = $ 3724.12. Therefore, the interest rate on the financing would be FC/ATF= 3724.12/3 (23,945) = 5.1% per annum.

interests and loans

Interests and loans assignment help.

  1. Comparison and Contrast of the Advantage of Paying Cash and Financing the Vehicle Over a Shorter Period of Time, as well as, the Impact of Finding Lower Interest Rates.

Paying in cash is advantageous because you gain ownership of the car immediately and one gets to avoid finance charges and other charges associated with the asset financing process. Purchase of a property or an asset that is worth more than $ 10,000 needs to meet certain compliances and additional taxes and also accrues penalties of non –compliance according to the IFRS requirement (“Legal Investment Requirements Governing New York Life Insurance Companies,” 2015). Therefore, if the car price was less than $10,000 paying cash price on the car would be recommended since there are no additional taxes or subject to compliance requirements. On the other hand, short term loans are relatively cheaper for the consumer. The consumer incurs fewer interest charges over the loan period and has a lower risk of becoming upside down. Lower interests encourage asset financing as the buyer is exposed to cheaper finance charges.interests and loans

  1. Advantages of Good Credit Versus Poor Credit When Qualifying for a Loan.interests and loans

Having good credit gives the lenders the confidence to increase the credit limit as well as offer the credit holder lower financing rates. It also increases an individual bargaining power when negotiating for lower rates as well as the loan processing charges (Richards, 2014) . A good credit record also helps an individual gain a high credit score which is significant when the lenders are evaluating the credibility of an individual.

The implications of Your Credit Score on the Interest Rates You May Qualify for.interests and loans

Interests and loans assignment help.

Credit score ranges between 300 and 850 and plays a significant role in determining whether a loan request is approved or rejected (Chen, 2014) .  The higher the credit score, the more creditors and lenders gain confidence in an individual’s ability to repay their loans, and charge them a lower interest charge as well as lower interest rates. Individuals with lower credit scores are less likely to qualify for a loan, and when they do, they are charged with high-interest rates as well as incur higher loan processing fees.

 

 

References

Chen, S. (2014). The Credit Cleanup Book: Improving Your Credit Score, Your Greatest Financial Asset. Santa Barbara, CA: ABC-CLIO.

Legal Investment Requirements Governing New York Life Insurance Companies. (2015). Project Financing, 489-493. doi:10.1002/9781119204169.app3

Richards, I. D. (2014). Business Credit 2014: Build Credit Fast. Iron Dane Richards & Iron Solutions Group, LLC.

 

Question: interests and loans

For this Assignment you will write an essay to address the requirements described below. Your essay must be carefully planned and written using well-constructed sentences and paragraphs. Make sure that your grammar and spelling are correct. Points will be awarded for content as well as composition. Your essay must be a minimum of 1 page in length with standard 1 inch margins and is required to have at least one reference from a reliable source. This means that you cannot use sites like Wikipedia, Ask.com®, and Yahoo® answers and that only references from reliable sources will earn points. All resources should be cited both as an in-text citation as well as being listed on a reference page in APA format.

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