Question - You have saved $4000 for a down payment on a new car. the largest monthly payment you can afford is $350. The loan will have a 12% APR based on end of month payments. What is the most expensive car you can afford if you finance it for 48 months? 60 months?
Question - You want to buy a house within 3 years, and you are currently saving for the down payment. you plan to save $5,000 at the end of the first year, and you anticipate that your annual savings will increase by 10% annually thereafter. Your expected annual return is 7%. how much will you have for a down payment at the end of year 3.