Question

Edna decided to purchase a $15,000 MSRP vehicle at a 5% interest rate for 3 years. The dealership offered her a $1500 cash-back incentive, which she accepted. If she takes all these factors into consideration, what monthly payment amount can she expect?

Answer 1

Answer:404.61

Explanation:

Answer 2

P = A/D, Where P = Monthly payments, A = Total amount owed = 15,000-1,500 = $13,500,


`D= (( 1+ (r)/(12) )^(nt) -1)/( (r)/(12) (1+ (r)/(12)) ^(nt) )`

r = 5% = 0.05, nt = 12*3 = 36

Therefore,
D =
`((1+ 0.05/12)^(36)-1 )/((0.05/12)(1+0.05/12)^(36) )` = 33.37

Then,

P = 13,500/44.37 = $404.61
The correct answer is c.