+0

# Help 10 ​

-1
250
6
+4116

Help 10

Oct 15, 2018

#1
+102320
+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

Oct 15, 2018
#2
+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%.

Oct 15, 2018
#3
+102320
+1

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

CPhill  Oct 15, 2018
#4
+4116
0

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

Oct 17, 2018
#5
+4116
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
+102320
+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

Oct 17, 2018