Asked by Charlie Giles on Apr 29, 2024
Verified
You are buying a previously owned car today at a price of $4,950. You are paying $750 down in cash and financing the balance for 42 months at 8.45%. What is the amount of each loan payment?
A) $108.54
B) $115.05
C) $115.86
D) $135.60
E) $136.55
Financing
The process of providing funds for business activities, making purchases, or investing, through various means such as loans, credit, or investment.
Previously Owned
Refers to items or assets that have been owned by another party before the current owner.
Loan Payment
The act of paying back a borrowed sum of money to a lender, typically including both principal and interest components.
- Grasp the techniques for computing the amounts due on loans, their remaining balances, and the cost of borrowing money.
- Apprehend how variant interest rates and time intervals affect the determination of present and future values.
Verified Answer
ZK
Zybrea KnightMay 03, 2024
Final Answer :
C
Explanation :
To find the monthly loan payment, you can use the formula for calculating loan payments or a financial calculator. The loan amount is $4,950 - $750 = $4,200. The interest rate per month is 8.45% per year, or 8.45/12 = 0.7042% per month. The number of payments is 42 months. Using the formula for an installment loan payment or a financial calculator, you find the monthly payment to be approximately $115.86.
Learning Objectives
- Grasp the techniques for computing the amounts due on loans, their remaining balances, and the cost of borrowing money.
- Apprehend how variant interest rates and time intervals affect the determination of present and future values.