Problem

When money is borrowed to purchase an automobile, the amount borrowed A determines the mon...

When money is borrowed to purchase an automobile, the amount borrowed A determines the monthly payment P. In particular, if a dealership offers a 5-year loan at 2.9% interest, then the amount borrowed for the car determines the payment according to the following table. Use the table to define the function P = f(A) in this Exercise.

Amount Borrowed ($)

Monthly Payment ($)

10,000

179.25

15,000

268.87

20,000

358.49

25,000

448.11

30,000

537.73

Car Loans The equation of the line that fits the data points in the table is f(A) = 0.017924A + 0.01.

a. Use the equation to find f(28,000) and explain what it means.


b. Can the function f be used to find the monthly payment for any dollar amount A of a loan if the interest rate and length of loan are unchanged?

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