Hello Everyone, I just have one math question that I've been stuck on and I'd appreciate it if I could get some assistance on it. I thank you in advance for taking both your time and effort to help me out. Thanks so much.
Here it is:
Elise is buying a car for $14,390. She has a $1000 trade-in allowance and will make a $1500 down payment. She will finance the rest with a 4-year auto loan at 2.6% APR.
Monthly Car Loan Payment Per $1000 Borrowed
| Rate | 24-month loan | 36-month loan | 48-month loan | 60-month loan |
|---|---|---|---|---|
| 2.5% | 42.760 | 28.861 | 21.914 | 17.747 |
| 2.6% | 42.805 | 28.905 | 21.958 | 17.791 |
| 2.7% | 42.849 | 28.949 | 22.002 | 17.836 |
| 2.8% | 42.893 | 28.993 | 22.046 | 17.880 |
| 2.9% | 42.937 | 29.037 | 22.090 | 17.924 |
| 3.0% | 42.981 | 29.081 | 21.134 | 17.969 |
A) How much money will she borrow in an auto loan?
B)What will her monthly auto payment be?
Once again, thanks so much for taking time out of your schedule to help assist me. :)
Per the table, a 2.6% loan for 4 years (i.e., 48 months) will cost her 21.958 dollars per month for every thousand she finances. So how many thousands will she need to borrow? The car costs 14,390, but with a 1,000 trade in and 1,500 in cash, she ends up needing to borrow 11,890.
11,890 can be written as 11.890 x 1,000 so Elise's monthly payment will be 11.890 x 21.958
A. She will borrow 14,390 minus 1,000 minus 1,500 = 11,890 dollars
B. Her monthly payment will be 11.890 x 21.958 = 261.08 dollars per month
The problem didn't ask for the following, but here it is anyway.
C. For the 11,890 she borrows, she will end up paying back a total of 48 x 261.08 = 12,531.84
.
