Thursday, May 1, 2008

Alright so i'm the scribe for some reason, but luckily all we did in class is some quiz and for some mythical reason i seem to remember some of the question, I forgot one of the question which is important, I guess the other questions can't be solved.

-So some person is gonna get a sum of cash, but he wants to buy a $20,000 car. His lawyer offers him two options.

Option 1.
pay cash for the car
the rest of $370,000 is invested at a rate of 4% per year, compounded monthly.

Option 2.
Receive $4000 a monthly for the next 10 years
- Finance your car for 5 years with a interest rate of %5 compounded monthly
- Invest the remaining monthly allowance at a rate of 3.8% per year compounded monthly

Basically try to find which is better.

I shouldn't be the scribe but I guess i'll do today because its easy. So the next scribe is Sezy

1 comment:

d[x_x]b said...

some of the questions were something like..

1) find the final value for option 1 after 10 years.

2) find the monthly payment something something for the car with option 2

3) ?

4) find the final value of the investment in option 2 for the first 5 years

5) find the final value of the investment in option 2 for the next 5 years

6) which one is better, state 2 reasons.