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###### Finance

1.You are negotiating a deal for the purchase of a new vehicle! The sticker price of the vehicle is \$21,595. You mention you have a \$400/mo budget. The dealer tells you he can give you a 60 month loan at an interest rate of 5.25% APR, with payments of ONLY \$395.80!!! Round all answers to the nearest cent. a. What price is he offering for the vehicle? (equivalent cash payment): \$ You respectfully decline this offer and offer to pay \$20,000 for the vehicle (at 5.25%). b. What would that make the payments be? S The dealer has one final offer for you: \$20,300 for the vehicle, only 2.5% APR. Is this a better than \$20,000 at 5.25%APR? Option 1: \$20,300 @ 2.5% APR Option 2: \$20,000 @ 5.25% APR PMT. \$ PMT. \$ Total Paid: \$ Total Paid: \$ c. Which option is better?

2.Calculate the value of a bond that will mature in 18 years and has a ?\$1,000 face value. The annual coupon interest rate is 15?percent, and the? investor's required rate of return is 12 percent.

3.Sarah Wiggum would like to make a single investment and have \$2.5 million at the time of her retirement in 25 years. She has found a mutual fund that will earn 5 percent annually. How much will Sarah have to invest today? If Sarah earned an annual return of 16 percent, how soon could she then retire? a. If Sarah can earn 5 percent annually for the next 25 years, the amount of money she will have to invest today is \$ 738256.93. (Round to the nearest cent.) b. If Sarah can earn an annual return of 16 percent, the number of years until she could retire is years.