Vehicle Finance - Essential Mathessentialmath.weebly.com/uploads/4/3/0/3/43030573/... · Vehicle...

Vehicle Finance 2 Marks

13. Sally recently graduated from college and has started working at her first job. She has decided H6

to lease a car. State one reason why leasing may be a good choice for Sally. Justify your reason.

Essential Mathematics: Student Booklet (January 2013) 15

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5 Marks

14. Lindsay rakes her car to a Manitoba car dealership for servicing. The dealership charges 117

$95 per hour for labour. The following items were replaced: four (4) spark plugs for $2.25 each, one (1) air filter for $12.50 and one (1) headlight for $30. The job took 1.25 hours to complete.

Calculate the total cost of repairs including taxes.

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16 Essential Mathematics: Student Booklet (January 2013)

4 Marks

15. Maryann borrows $12 500 from her bank to purchase a car. The bank offers her a rate of 6.75% per year for 5 years.

Monthly Vehicle Loan Payments per $1 000 borrowed

Interest Years to Repay Loan

Rate % 1 2 3 4 5

4.00 85.15 4342 29.52 22.58 18.42

4.25 85.26 43.54 29.64 22.69 18.53

4.50 85.38 43.65 29.75 22.80 18.64

4.75 85.49 43.76 29.86 22.92 18.76

5.00 85.61 43.87 29.97 23.03 18.87

5.25 85.72 43.98 30.08 . 23.14 18.99

5.50 85.84 44.10 30.20 23.26 19.10

5.75 85.95 44.21 30.31 23.37 19.22

6.00 86.07 44.32 30.42 23.49 19.33

625 86.18 44.43 30.54 23.60 19.45

6.50 86.30 44.55 30.65 23.71 19.57

6.75 86.41 44.66 30.76 23.83 19.68

7.00 86.53 44.77 30.88 23.95 19.80

7.25 86.64 44.89 30.99 24.06 19.92

7.50 86.76 45.00 31.11 24.18 20.04

7.75 86.87 45.11 31.22 24.30 20.16

8.00 86.99 45.23 31.34 24.41 20.28

A) Calculate the monthly payment. (2 marks) 118

friL B) Calculate the total amount of interest paid over the life of the car loan. (2 marks) 119

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Essential Mathematics: Student Booklet (January 2013)

17

3 Marks

16. Drew has recently purchased a vehicle for $17 100. He borrowed $15 000 at 6.25% interest 120

for 5 years. Complete the amortization table below.

Month Monthly Payment

Interest Principal Unpaid Balance

,c $1500000

1 $291.75 $78.13 $213.62 $14786.38

2 $291.75 $77.01 $214.74 1;L2 3 $291.75 T753 $14355.78


1 Mark

17. Choose the letter that best completes the statement below.

When purchasing car insurance, a deductible is:

a) the amount you pay every year for the insurance.

b) a one-time lump sum you pay the insurance company when you first buy the car.

c) the amount of the insurance claim you must pay when at fault for an accident.

d) the amount you pay for extra coverage against damage to another person or their property.

Answer: et


121

4 Marks

18. State and explain two (2) factors that may increase a car insurance premium in Manitoba. 122

Factors Explanations

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1 Mark

19. Explain why a car insurance policy with a $200 deductible will cost more than a similar policy with a $500 deductible.

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123



1. You are purchasing a vehicle. The bank will lend you $16 500, repayable over 3 years at an interest rate of 4.25%. Calculate the monthly payment.

Monthly Vehicle Loan Payments per $1000 borrowed


Rate (%) 1 2 3 4 5

4.00 85.15 43.42 29.52 22.58 18.42

4.25 85.26 43.54 29.64 22.69 18.53

4.50 85.38 43.65 29.75 22.80 18.64

4.75 85.49 43.76 29.86 22.92 18.76

5.00 85.61 43.87 29.97 23.03 18.87

5.25 85.72 43.98 30.08 23.14 18.99

5.50 85.84 44.10 30.20 23.26 19.10

5.75 85.95 44.21 30.31 23.37 19.22

6.00 86.07 44.32 30.42 23.49 19.33

6.25 86.18 44.43 30.54 23.60 19.45

6.50 86.30 44.55 30.65 23.71 19.57

6.75 86.41 44.66 30.76 23.83 19.68

7.00 86.53 44.77 30.88 23.95 19.80

7.25 86,64 44.89 30.99 24.06 19.92

7.50 86.76 45.00 31.11 24.18 20.04

7.75 86.87 45.11 31.22 24.30 20.16

8.00 86.99 45.23 31.34 24.41 20.28

Essential Mathematics: Student Booklet (June 2013) 1

101

2 Marks

2. Tom wishes to buy a new car in Manitoba for $18 000. The car dealership has agreed to accept Tom's old car with a trade-in value of $2000. Calculate the total cost including taxes to buy the new car.

102

2 Essential Mathematics: Student Booklet (June 2013)

2 Marks

3. Describe one (1) advantage and one (1) disadvantage of purchasing a new car instead of leasing one.

Advantage of purchasing Disadvantage of purchasing

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103


5 Marks

104

4. You are leasing a vehicle. The monthly lease payment is $299 plus taxes for 36 months The lease requires a $4500 down payment.

A) Calculate the total amount paid over 36 months (3 marks)

B) You choose to purchase the vehicle at the end of the lease for the residual value (75% of the original value). The original cost of the vehicle was $34 000 plus taxes. Calculate the total amount paid for the vehicle. (2 marks)

105

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Essential Mathematics: Student Booklet (June 2013)

3 Marks

5. Phillip buys a used car for $1500. The price of a safety inspection on the car was $40. When registering the car, Phillip is told that the book value of the car is $3700. Calculate the total cost of purchasing the car.

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2 Marks

6. Nancy is going on a 1300 km car trip. Her car's fuel efficiency is C/100 Idni\The average price for fuel on her trip is estimated to be $1.20 per litre. Calculate e cost of fuel for her trip.

107

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13. Tom decides to buy a new car in Manitoba for $32 400. He adds a tow package to the car for $3000. The freight is $650. The dealership gives him $12 000 for his old car.

Calculate the cost, including taxes, of purchasing the new vehicle.

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118


4 Marks

14. Mary borrows $18 500 from her bank to purchase a car. The bank offers her an interest rate of 6.75% for 4 years.

Monthly Vehicle Loan Payments er $1000 borrowed

I nterest Years to Repay Loan

Rate (%) 1 2 3 4 5

5.00 85.61 43.87 29.97 23,03 18.87

5.25 85.72 43.98 30.08 23.14 18.99

5.50 85.84 44.10 30.20 23.26 19,10

5.75 85.95 44.21 30.31 23.37 19.22

6.00 86,07 44.32 30.42 23.49 19.33

6.25 86.18 44.43 30.54 23.60 19.45

6.50 86.30 44.55 30.65 23.71 19.57

6,75 86.41 44.66 30.76 , 23.83 19.68

7.00 86.53 44.77 30.88 23.95 19.80

725 86.64 44.89 30.99 24.06 19.92

7.50 86.76 45.00 31.11 24.18 20.04

7.75 86.87 45.11 31.22 24.30 20.16

8.00 86.99 45.23 31.34 24.41 20.28

A) Calculate the monthly payment. (2 marks)

300 y e3

OD D

119

120

B) Calculate the total amount of interest paid over the life of the loan. (2 marks)


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2 Marks

15. Dallas needs a vehicle to get to work. He has decided which vehicle he wants. State two (2) advantages of buying the vehicle, rather than leasing it.

121

Essential Mathematics: Student Booidet (January 2014) 17

2 Marks

16. Tom's vehicle uses 12.8 L of the! for every 100 km driven. The cost of fuel is $1.20/Litre. Calculate the cost of fuel for Tom to drive 3000 km.

122


4 Marks

17. Robert took his vehicle in for servicing at a Manitoba dealership. The dealership charged $90 per hour for labour. The servicing took 1.5 hours to complete. Two (2) windshield wipers were replaced at a cost of $12 each. Four (4) winter tires were put on at a cost of $120 each. Calculate the total cost, including tax, of the servicing.


123

2 Marks

18. State two (2) factors that determine the cost of vehicle insurance in Manitoba. 124

20 Fcsential Mathematics: Student Booklet (anuary 2014)

1 Mark

19 Tammy drives her car 20 kilometres to work each day. State the type of insurance policy Tammy will need for proper coverage.

125


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7. John wants to lease a vehicle for 3 years. The monthly lease payment is $650. A down payment of $5000 is required. All taxes are included in the payments.

A) Calculate the total cost of the lease (2 marks)

B) John decides to purchase the vehicle at the end of the lease. The initial value of the vehicle was $45 000 including taxes. Its residual value after 3 years is 45%. Calculate the total amount he will pay for the vehicle. (2 marks)

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109

110

2 Marks

8. Describe one benefit of buying a new vehicle and one benefit of buying a used vehicle.

Benefit of buying a new vehicle Benefit of buying a used vehicle

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111

8 Essential Mathematics Student Booklet (June 2014)

2 Marks

112 9. The odometer reads 15 924 km before Seth leaves for a trip. After using 73 2 L of fuel,

the odometer reads 16 519 km. Determine the fuel efficiency of his vehicle in L/100 km.

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100

Fckential Mathematics: Student Booklet (June 2014) 9

4 Marks

10. Brian bought a car valued at $28 600. It depreciates at 20% per year. Complete the table to find the value of the vehicle after 2 years.

Year Vehicle Value Depreciation Amount Year-end Value of Vehicle

1 $28600 k -n-o 02,2 g a/ 0

2 'I 22 2k' O ._

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113


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3 Marks

11. Joe borrows $16 750 at 7% over 5 years to purchase a car.


Interest Years to Repay Loan Rate (%) 1 2 3 4 5

4.00 85.15 43.42 29.52 22.58 18.42 425 85.26 43.54 29.64 22.69 18.53 4.50 85.38 43.65 29.75 22.80 18.64 4.75 85.49 43.76 29.86 22.92 18.76 5.00 85.61 43.87 29.97 23.03 18.87 5.25 85.72 43.98 30.08 23.14 18.99 5.50 85.84 4-4.10 30.20 23.26 19.10 5.75 85.95 44.21 30.31 23.37 19.22 6.00 86.07 44.32 30.42 23.49 19.33 6.25 86.18 44.43 30.54 23.60 19.45 6.50 86.30 44.55 30.65 23.71 19.57 6.75 86.41 44.66 30.76 23.83 19.68 7.00 86.53 44.77 30.88 23.95 19.80 7.25 86.64 44.89 30.99 24.06 19.92 7.50 86.76 45.00 31.11 24.18 20.04 7.75 86.87 45.11 31.22 24.30 20.16 8.00 86.99 45 23 31.34 24.41 20.28

114 A) Calculate his monthly payment. (2 marks)

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115 B) State the amount of interest paid in the first month. (1 mark)

Essental Mathematim: Student Booklet (June 2014) 11

1 Mark

12. Choose the letter that best completes the statement below.

When insuring a vehicle in Manitoba, the factor that affects your premium is:

a) your education

b) where you live

c) your gender

d) the insurance agent you purchase from

e) your age

Answer:

12 Essential Mathematics: Student BooWet (June 2014)

116

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Vehicle Finance

2 Marks

12. Tyson has a job that requires a vehicle for out-of-town travel. On average, he drives at least 3000 km per month. State one advantage and one disadvantage of leasing a vehicle.

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Essential Mathematics: Student Booklet ()anuary 2015) 13

2 Marks

13. Shannon lives in Manitoba and is going to buy her neighbour's car for $6500. The neighbour is paying for the safety inspection and the lien search. The book value for the car is $8000. Calculate the total cost to purchase the car after taxes.

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117

4 Marks

118

14. Bonnie wishes to buy a new vehicle from a Manitoba dealership for $16 200 before taxes. She has $5000 saved for a down payment

A) Calculate the amount Bonnie needs to borrow to purchase the vehicle. (2 marks)

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119

B) Bonnie can get a loan for 4 years at 5..5%. Calculate the amount of interest in the first month's payment (2 marks)

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2 Marks

15. A car travels 2400 km and consumes 200 L of fuel. Calculate the fuel economy in L/100 km for the car.

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120


2 Marks

16. Frank has been leasing his pickup truck for the last 3 years. He has made a total of $16 028 in payments; which included a down payment of $3500.

Calculate Frank's monthly lease payments.

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Essential Mathematics: Student Booklet (January 2019 17

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17. Sam has been involved in a car accident. Explain if this will affect the cost of his Manitoba vehicle insurance.

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2 Marks

18. A brand new car costs $26 800 after taxes. It will depreciate 15% in the first year. Calculate the value of the car after the first year.

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123

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2 Marks

19. Sylvie takes her car in for a seasonal maintenance checkup at a Manitoba dealership. In addition to the basic $60 fee, Sylvie gets an oil change for $50, and a new set of brake pads for $80. The mechanic spends 1.5 hours working on the vehicle at a rate of $90 per hour.

Calculate Sylvie's total bill, after taxes.

124



120

12. Describe 2 disadvantages of leasing a new car.

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Essential Mathematics: Student Booklet (June 2015)

4 Marks

13. Carter is purchasing a new vehicle for $27 800, after taxes. He makes a down payment of $3000. The bank offers financing for 5 years at a rate of 6.25%.



Rate (%) 1 2 3 4 5

5.00 $85.61 $43.87 $29.97 $23.03 $18.87

5.25 85.72 43.98 30.08 23.14 18.99

5.50 85.84 44.10 30.20 23.26 19.10

5.75 85.95 44.21 30.31 23.37 19.22

6.00 86.07 44.32 30.42 23.49 19.33

6.25 86.18 44 43 30.54 23.60 E19.45)

6.50 86.30 44.55 30.65 23.71 19.57

6.75 86.41 44.66 30.76 23.83 19.68

7.00 86.53 44.77 30.88 23.95 19.80

A) Calculate the monthly payment. (3 marks)

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B) Calculate the total paid for the vehicle by the end of the 5-year term. (1 mark)

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122

2 Marks

14. A previously leased vehicle with an original value of $18 300 is for sale at a Manitoba dealership. The residual value is 58%. Calculate the total cost to buy the vehicle, after taxes.

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111


3 Marks

15. Paige is planning to go on a 3000 km road trip. She owns a truck and a car. The truck uses 8.5 L of fuel per 100 km The car uses 6 L of fuel per 100 km.

A) State which vehicle Paige should use if she wants to get the best fuel economy. (1 mark)

Or;

B) State the number of litres used during the trip by the vehicle selected in Part A. (1 mark)

are so x 6 L _ / 00

)90

C) State the total cost of fuel for the trip if gas costs $1.23/L (1 mark)


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115

126

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3 Marks

127 16. Desarae is purchasing a vehicle in Manitoba through a private sale for $12 000. A lien

search was done for $18. The book value of the vehicle is listed as $13 500. Desarae has a safety check performed for $40. Calculate the total cost of purchasing the vehicle after taxes using the table below.

Taxes on Vehicle Purchases

PST GST

Buying New PST GST

Buying Used from Dealership

PST calculated on greater of book value

or purchase price GST

Buying Used (Private) PST calculated on

greater of book value or purchase price

No GST

Safety No PST GST

Materials and Labour PST GST

Lien Search No PST No GST

16 Essential Mathematics Student Booklet (June 2015)

2 Marks

17. Bill had his vehicle's exhaust system repaired at a Manitoba dealership. Labour charges were $110 per hour. The cost of the exhaust system parts were: converter $350, muffler $120, and exhaust pipe $80. The job required 1.5 hours of labour to complete.

Calculate the total cost of the repairs, after taxes.

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128


2 Marks

129 18. State 2 factors that affect the cost of vehicle insurance premiums other than driving record,

traffic tickets, and at-fault accidents.


2 Marks

19. A car collector owns a vehicle worth $37 500. The vehicle depreciates 20% per year. Calculate the value of the vehicle after the first year.

130

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