When thinking about purchasing a car, Tarek came up with the following estimates. First, he’s confident...
When thinking about purchasing a car, Tarek came up with the following estimates. First, he’s confident that he can dedicate a total of $400 per month in cash flow for the purchase and maintenance of a car. Tarek also estimated the following monthly expenses: gas $55, insurance $100, maintenance $25, and repairs $15 (assuming he buys a new car). Based on these estimates, how much can Tarek spend each month on a loan payment, assuming a 3-year, 6% annual APR loan?
Tarek can spend $___________ each month on a loan payment.
Homework Answers
Total monthly cash available to tarek = $400
Total monthly expenses except loan payment:
Thus, Tarek can spend monthly on a loan payment:
Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
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