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Help 10

NotSoSmart  Oct 15, 2018
 #1
avatar+90968 
+1

Here's what I get, NSS

 

For a new car

 

P = 350

r = .0279/12

n = 72

 

A =  350 [ (1 + .0279/12)^72 - 1 ] / [(.0279/12) ( 1 + .0279/12)^72 ] ≈ $ 23,178.95

 

For a used car only  r is different....it is   (.0329/12)

 

So we have

 

 350 [ (1 + .0329/12)^72 - 1 ] / [(.0329/12) ( 1 + .0329/12)^72 ] ≈  $ 22,840.34

 

 

cool cool cool

 

 

CPhill  Oct 15, 2018
 #2
avatar
+1

CPhill: You made a small error in that Tyresa "wants to buy a car but doesn't want to spend more than $350 a month FOR A MAXIMUM OF FOUR YEARS". That is the term is for 48 months. The rates offered by the bank are for UP TO 72 MONTHS.

 

At any rate, here are the amounts worked out for 48 MONTHS:

1) Maximum amount to borrow for a new car @ 2.79%, $350 per month, for 4 years or 48 months.

The amount =$15,879.04. Use the formula given to you to get this amount.

2) Maximum amount to borrow for a used car @ 3.29%, $350 per month, for 4 years or 48 months.

The amount=$15,721.34. Again, use the formula given to you to get this amount.

Note: As you can see, there is very little difference between the two, because the difference in interest rates is very small, 0.5%. 

Guest Oct 15, 2018
 #3
avatar+90968 
+1

OOPS...thanks, guest for the correction  !!!

 

 

cool cool cool

CPhill  Oct 15, 2018
 #4
avatar+3636 
0

Umm so how do i write that out for that correction??

NotSoSmart  Oct 17, 2018
 #5
avatar+3636 
0

For the new car it would be 9196.52? and for used car it would be 8388.86 dollars?

NotSoSmart  Oct 17, 2018
 #6
avatar+90968 
+2

My equations should have been : 

 

New Car

 

A =  350 [ (1 + .0279/12)^48 - 1 ] / [(.0279/12) ( 1 + .0279/12)^48 ]  = $15,879

 

Used Car

 

A  = 350 [ (1 + .0329/12)^48 - 1 ] / [(.0329/12) ( 1 + .0329/12)^48 ]  = $15, 721.34

 

 

cool cool cool

CPhill  Oct 17, 2018

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