Question

Drive-A-Lot Cars runs a promotion for three years of interest-free payments on sedans. The cost of a new sedan is $22,968 (including tax). What is the average monthly payment a customer will make if they pay off the car during the interest-free period? Type your answer in the box. $ _____

Answer 1

Answer:638

Explanation:

Answer 2

$ 638

Explanation:

Cost of a new Sedan including taxes = $ 22,968

Since the customer pays back the amount in interest-free period, he will have to the actual price only without having to pay any additional interest.

This means, the customer will have to pay $ 22,968 in a period of 3 years,

There are 12 months in a year. So in 3 years there will be 3 x 12 = 36 months

The customer have to pay $ 22,968 in 36 months. In order to find how much he needs to pay in 1 month, we simply divide $ 22,968 by 36. This would give us the monthly payment that the customer needs to make.

So, the average monthly payment would be =
`(22968)/(36)=638`

Thus, the customer will have to make average monthly payment of $ 638 to pay of the car during the interest-free period.