Answer: $17,788.20
Explanation:
To calculate the monthly payment, we can use the loan formula:
P = (r * A) / (1 - (1 + r)^(-n))
where:
P is the monthly payment
A is the loan amount, which is the sale price of the car ($16,000) in this case
r is the monthly interest rate, which is the annual percentage rate (APR) divided by 12 (4% / 12 = 0.003333...)
n is the total number of payments, which is the number of years of the loan multiplied by 12 (5 years * 12 = 60)
Substituting these values into the formula, we get:
P = (0.003333... * $16,000) / (1 - (1 + 0.003333...)^(-60))
P ≈ $296.47
Therefore, the monthly payment is approximately $296.47, which is within the budget of $300/month.
To calculate the total cost of the car after the loan has been paid in full, we can multiply the monthly payment by the total number of payments (60) and add the original sale price of the car:
Total cost = P * n + A
Total cost = $296.47 * 60 + $16,000
Total cost = $17,788.20
Therefore, the total cost of the car after the loan has been paid in full is approximately $17,788.20.