Question

22.) You are buying a car online to be delivered to your house. The purchase price is $18,500. You decide to make adown payment of $4,000 and borrow the rest with a loan from your credit union. The loan you accept is at 3.2%APR, compounded quarterly for 4 years.a.) What total amount do you pay for the car?b.) How much interest do you pay?c.) What will be your monthly payments?

Answer 1

Step-by-step explanation

From the above, we can see that the individual has to borrow

`18500-4000=14500`

Since the loan you accept is at 3.2% APR, compounded quarterly for 4 years. Therefore, we w ill have;

`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ A=14500(1+(0.032)/(4))^(4*4) \\ A=16471.62763 \end{gathered}`

Therefore, the total amount he pays for the car.

Part A

`4000+16471.63=20471.63`

Answer: 20471.63

Part B: Interest

Answer:

`20471.63-18500=1971.63`

Answer: 1971.63

Part C: Monthly Payments

`(16471.63)/(4*12)=343.158`

Answer: 343.16