Question

Jim wants to purchase a used car. The price is $12,000 cash or $2,500 down and 24 monthly payments of $450.00. Jim decided to finance the boat.

Answer 1

The amount that will be financed: $9500

The total amount of the monthly payments: $10,800

The amount of the finance charge: $1,300

Step-by-step explanation

Remember that the down payment is the initial amount you paid to reduce the amount you finance.

Given that, the amount that Jim will finance will be the price of the bath in cash minus the down payment:

Amount that will be financed = $12,000 - $2,500 = $9500

Next, to find the total amount of the monthly payments, we just need to multiply the monthly payment by the total number of monthly payments:

Total amount of the monthly payments = $450.00*24 = $10,800

Finally, to find the financial amount, we just need to subtract the financed amount from the total amount of the monthly payments:

Amount of the finance charge = $10,800 - $9500 = $1,300