Question

Reg has just purchased a new car. The car had a list price of $22,499, and he was responsible for 7.96% sales tax, a $2,138 vehicle registration fee, and a $262 documentation fee. Reg’s financing has an interest rate of 10.27%, compounded monthly, and a duration of three years. If Reg makes a monthly payment of $773.89, which of the following was his down payment? Round all dollar values to the nearest cent.

a.
$2,000
b.
$2,200
c.
$2,500
d.
$2,800

Answer 1

D) just took the test

Explanation:

Answer 2

The answer is option D: $2800

Explanation:

As given, there was 7.96% sales tax, $2,138 vehicle registration fee, and a $262 documentation fee.

So, total Amount becomes =
`7.96 \% * 22499 +262+2138+2249`

= $26689.92

Reg’s financing has an interest rate of 10.27%, compounded monthly, and a duration of three years.

r = 10.27% or

n =
`12*3 =36`

Also given that Reg makes a monthly payment of $773.89.

Monthly payment =
`773.89=((22499-x)* (10.27)/(1200))/(1-(1+(10.27)/(1200))^(-36))`

Solving this we get;

x = 23889.84

Hence, the down payment was =
`26689.92-23889.84=2800.08` dollars

Therefore, the answer is option D: $2800