Question

Sally already has $5,000 saved and she wants to buy a car now. She decides to take out a loan for the other $10,000 to buy her car. After giving him the $5,000 in cash, the salesman tells her she will pay $500 a month for the next 2 years (24 months). How much total money will she pay for the $10,000 the loan?

What is the total Sally pays for her $15,000 car?

Answer 1

Sally will pay $12,000 in total for the $10,000 loan after 24 months of $500 payments, and therefore, the total cost of her $15,000 car will be $17,000 including her initial savings.

Step-by-step explanation:

The student in question has taken out a loan for $10,000 to purchase a car, on top of her $5,000 savings. According to the terms provided by the salesman, Sally will pay $500 a month for the next 24 months. To find out how much total money she will pay for the $10,000 loan, we multiply the monthly payment by the number of months: $500 x 24 = $12,000.

To determine the total Sally pays for her $15,000 car, we add her initial savings to the total loan repayment amount: $5,000 + $12,000 = $17,000. Therefore, Sally will pay a total of $17,000 for the car.