You are purchasing a car for $12,465.00 plus 5.65% sales tax. You make a $1,300.00 down...
You are purchasing a car for $12,465.00 plus 5.65% sales tax. You make a $1,300.00 down payment and have a fair credit score. How much interest is due at the end of the first month?
Homework Answers
Total cost of car = list price + tax = $12,465.00 + ($12,465.00 * 5.65%) = $13,359.44
The average interest rate for car loans (with average credit score) is 5.27%.
Interest due at end of 1st month = total cost of car * interest rate / 12 (we divide by 12 because we are calculating interest for 1 month, whereas the interest rate given is the annual interest rate)
Interest due at end of 1st month = $13,359.44 * 5.27% / 12
Interest due at end of 1st month = $58.67
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