Barb is buying a new car for $14,000. Her old car has a trade-in Value of...
Barb is buying a new car for $14,000. Her old car has a trade-in Value of $2500. The dealer informs her that the financing charge is 3% add-on interest. She wishes to take 2.5 years to pay off the car. Answer the following:
How much is her down payment? [trade-in value of old car]
How much does she need to finance?
How much interest will she pay?
What will her monthly payment be?
What will be the total amount to be repaid?
Homework Answers
ANSWER:
| WORKING | |||||
| A | DOWN PAYMENT | (TRADE IN VALUE OF OLD CAR) | $2,500 | ||
| B | AMOUNT SHE NEEDS TO FINANCE | =14000-2500 | $11,500 | ||
| C | TOTAL INTEREST SHE WILL PAY IN 2.5 YEARS | =11500*0.03*30/12 | 862.5 | ||
| ASSUMING INTEREST IS PER ANNUM BASIS | |||||
| D | MONTHLY PAYMENT | PRINCIPAL | =11500/30 | $383.33 | |
| INTEREST | =H6/30 | $28.75 | |||
| TOTAL MONTHLY PAYMENT | $412.08 | ||||
| E | TOTAL AMOUNT TO BE REPAID | PRINCIPAL | =14000-2500 | $11,500 | |
| INTEREST | =11500*0.03*30/12 | 862.5 | |||
| TOTAL AMOUNT | $12,363 | ||||
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