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MGG 503 Homework: Due February 12, 2016Purchasing a vehicle can be both an exciting and financially stressful opportunity. While shopping for a vehicle, whether online or at a dealership, the “sticker price” can often be misleading. Factors to consider in addition to the sticker price include:Applicable interest rate to your financial situation The length of the loan contract (how long you have to make payments)The value of any down payment or vehicle trade in valueAll of the above can affect what your monthly payment will be once you take ownership of the vehicle. ASSIGNMENT: Choose a car or truck that you would like to own. Kelley Blue Book () is a great resource for vehicle prices. You may also use any car dealership website. These sites will also have payment calculators on them to help you calculate your monthly payment, given your specific parameters (interest rate, down payment, length of loan.) This is an individual hypothetical assignment. You may choose any vehicle you want, (BMW, Smart Car, etc.), assume any down payment (down payment will reduce the amount you would have to finance).For the length or term of the loan on the vehicle, please select a time frame within 3-7 years (36-84 months).For the interest rate, please select a reasonable rate within 2%-8% range.Once you have selected a vehicle, enter your inputs into the payment calculator, and print/screenshot the calculated number on both a new and used version (same vehicle class).Log in the data in the grid below. NewUsedMake/ModelCost of Vehicle (Sticker price)Down Payment (if any, or trade in)Total to be financedLength/Term (years/months)Interest Rate (APR)Payment (Calculated with site calculator)Total Price of Car (# of years*12 monthly pmts)+ down payment7. Using excel and the same vehicle parameters above, “verify” the payment amount by using the Present Value components discussed in the slides, and the JEEP example under Chapter 18. Submission RequirementsCompleted grid aboveCopy of the payment calculator with your payment displayed for both new and usedExcel spreadsheet proving the values of the payment calculator. Spreadsheet MUST have calculations. Hardcoded numbers will not be accepted. Have some fun with these tools, once you submit your assignment. You can change the amount of down payment, or select a different vehicle to see what your payment would be. Likewise, you can enter an amount into excel as the payment you can afford, and have it generate a “value” of a vehicle you could potentially afford.Helpful HintsUnder Kelley Blue Book: the payment calculator is under “Research Tools”On individual dealership sites, the calculator is usually under “Financing”Leasing a vehicle is also an option. The “amount due at signing” would be equivalent to a down payment. ................
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