6.11.0: Exercises
- Page ID
- 171723
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)What are the two main questions to answer before buying a car?
What is a documentation fee?
What is a dealer preparation fee?
What is a down payment?
How long do leases typically last?
Can you drive a leased car any mileage?
What are three fees associated with leasing a car?
What is the monthly depreciation for a leased car?
How are the money factor and the annual percentage rate related?
Name two advantages to leasing over buying a car.
Name two advantages to buying a car over leasing a car.
What does liability insurance cover?
What does collision insurance cover?
Many expenses associated with a car can be anticipated. Name three maintenance expenses that can be anticipated.
In the following exercises, find the total cost to purchase the car.
Alexia negotiates a purchase price of $17,850 for her new car. The sales tax in her area is 6.5%. Her license, plates, and registration come to $285.00. The dealership charges her a $600 destination fee and a $150 processing fee. How much will she finance in total for the car?
Stephanie negotiates a purchase price of $25,670 for her new car. The sales tax in her area is 8.0%. Her license, plates, and registration come to $389.00. The dealership charges her a $700 destination fee and a $345 processing fee. How much will she finance in total for the car?
Matthew negotiates a purchase price of $35,100 for her new car. The sales tax in his area is 7.25%. His license, plates, and registration come to $325.00. The dealership charges him a $900 destination fee and a $125 processing fee. How much will he finance in total for the car?
Madisyn negotiates a purchase price of $45,800 for her new car. The sales tax in her area is 7.25%. Her license, plates, and registration come to $199.00. The dealership charges her a $1,000 destination fee and a $275 processing fee. How much will she finance in total for the car?
In the following exercises, calculate the car payment based on the total financed and the interest rate.
Total to be financed is $36,775, interest rate is 2.75%, for 6 years.
Total to be financed is $29,350, interest rate is 3.9%, for 5 years.
Total to be financed is $27,180, interest rate is 1.99%, for 7 years.
Total to be financed is $15,489, interest rate is 6.75%, for 4 years.
In the following exercises, find the total cost to obtain the lease.
A $2,000.00 down payment, $120 in acquisition fees, a security deposit of $350.00, $200.00 in disposition fees, and sales tax of $2,860.
No down payment, $260 in acquisition fees, a security deposit of $450.00, $400.00 in disposition fees, and sales tax of $3,155.00.
A $4,000 down payment, $360 in acquisition fees, a security deposit of $900.00, $1,000.00 in disposition fees, and sales tax of $4,275.
A $7,000.00 down payment, $225 in acquisition fees, a security deposit of $800.00, $675.00 in disposition fees, and sales tax of $3,673.
In the following exercises, find the monthly depreciation of the car.
The purchase price of a car is $34,000. Its residual price is $23,500. What is its monthly depreciation for a 24-month lease?
The purchase price of a car is $23,500. Its residual price is $11,750. What is its monthly depreciation for a 36-month lease?
In the following exercises find the APR based on the MF.
MF = 0.00004125
MF = \(0.000046458\overline 3 \)
In the following exercises find the MF based on the APR.
8.75%
6.25%
In the following exercises, find the lease payment based on the given information.
Price is $41,700, residual price is $27,105, 24-month lease, money factor is 0.000025.
Price is $22,165, residual price is $12,855.70, 24-month lease, money factor is 0.0000275.
Price is $30,650, residual price is $16,857.50, 36-month lease, APR is 8.25%.
Price is $24,800, residual price is $14,384, 36-month lease, APR is 5.85%.
Sara needs to budget for her car maintenance. She expects to buy new tires each 3 years, which will cost her $540 to replace them all. Oil changes near her cost $39.99, and she believes she will get one every 4 months. Her inspection costs $20 per year. Wipers for her car cost $115 for all three and she anticipates changing them every year. She drives less than 30,000 miles per year, so she plans to replace the air filter once per year. The air filter for her car costs $36.25. She plans to get new brake pads every year, which cost her $267. How much should she budget per month to cover these costs?
Mwibeleca needs to budget for his car maintenance. He expects to buy new tires each 3 years, which will cost her $560 to replace them all. Oil changes near his cost $69.99, and he believes he will get one every 4 months. His inspection costs $25 per year. Brake pads will cost $215 each year. Wipers for his car cost $143.50 for all three and he anticipates changing them every year. He drives less than 30,000 miles per year, so he plans to replace the air filter once per year. The air filter for his car costs $62.88. How much should Mwibeleca budget per month to cover these costs?
John will either lease or buy a car. The total cost to purchase the car is $35,830, and he would finance the car for 5 years at 2.99%. If he leases, he would pay $3,287.50 for the lease, and then his payments would be based on a price of $32,750, a residual price of $20,305, 36 months, with a money factor of 0.00001725. Compare the payments to purchase the car to the payments of the lease plus the lease cost divided by 36.
Zachary will either lease or buy a car. The total cost to purchase the car is $22,945, and he would finance the car for 6 years at 1.99%. If he leases, he would pay $2,387.75 for the lease, and then his payments would be based on a price of $21,350, a residual price of $12,390.30, 36 months, with a money factor of 0.000018375. Compare the payments to purchase the car to the payments of the lease plus the lease cost divided by 36.