Calculator Problem – 11/03/2014

A tractor company is offering $0 down and 0% financing for 60 months.  If the tractor costs, $16,618 and your cost of capital is 10%, what is the equivalent cash price today?

(The answer will be posted with the new calculator problem in 2 weeks. Or if you can’t wait that long, you can go to https://www.facebook.com/garyjohnstonseminars for the answer.)

Answer for 10/20/2014 problem:

(N=360,I=4,PV=100,000,FV=0) PMT=$477.42
(N=360,I=5,PV=100,000,FV=0) PMT=$536.82
$ increase                                               $  59.40
% increase = $59.40 / $477.42 = 12.44%