Question

The​ "Repo Man" recently repossessed your car for failure to make payments. You still owed​ $5,000 on the​ loan, but since it was always​ broken, you were glad to get rid of it anyway. The bank sold the car at a wholesale auction for​ $3,000. The bank also paid the​ "Repo Man"​ $200 and paid attorney fees of​ $300. Based on the deficiency payments clause in your​ loan, what are you liable​ for?

Answer 1

$2,500

Step-by-step explanation:

Loan amount = $5,000

The car was auctioned for $3,000 and the parties involved in the auction transaction has to be paid before net income can be recognized.

Auction amount = $3,000

Less; Repo Man's Fee = ($200)

Attorney's Fee = ($300)

Net amount = $2,500

Loan amount = $5,000

Less net amount = ($2,500)

Loan Balance = $2,500