Click on the link below for solution.
PV is calculated by using the built-in financial calculator in excel sheet.
To obtain the value the following input is given in the first case:
Rate = 1%; No. of periods = 48; Payment per period = 400.
Use PV function to obtain the value.
Place the cursor on B7 cell you will see the function of PV.
Similarly do it for the second case of 60 months.
Hope this is clear. I will clarify if you have any other doubt.
PV = 400 x PVIFA 1%, 48 periods
= 400 x 39.23065
Add down payment made 2,000
Maximum price of the car = 17,692.26
PV = 400 x PVIFA 1%, 60 periods
= 400 x 45.1986
Add cah down payment of 2,000
Maximum price of the car = 20,079.45
Note: the answers as per financial calculator and manual calculations differ slightly.