Question

You purchase a car from a dealer for $17,500. You pay a $2,500 down payment and finance the balance with a 5 year loan. Your monthly payments are $295.20. What is the amount that you finance?

Answer 1

The amount which have to finance is $ 17,712

Explanation:

Given as :

The cost of dealer = $ 17,500

The down payment for car = $ 2,500

So, The balance amount after down payment = ($ 17,500 ) - ( $ 2,500)

= $ 15,000

The loan of balance amount is finance for 5 year

So, The number of month = 5 × 12 = 60 months

∵ The monthly payment amount = $ 295.20

∴, The total payment for 60 months = $ 295.20 × 60 = $ 17,712

The interest which have to pay = $ 17,500 - $ 17,712 = $ 212

Hence , The amount which have to finance is $ 17,712 Answer

Answer 2

$17712

Explanation:

I purchased a car from a dealer for $17,500.

Now, I pay a $2500 down payment and finance the balance with 5 years i.e. (5 × 12) months loan.

The monthly payments are $295.20.

Therefore, I pay $295.2 every month to finance the balance with interest.

Therefore, the amount that I finance is $(295.2 × 5 × 12) = $17712. (Answer)