Final answer:
Without a complete amortization schedule or specific details on how the interest is applied to the unpaid balance, it is impossible to accurately calculate the total cost of the vehicle and the balloon payment. Further information is needed to provide the student with a correct answer.
Step-by-step explanation:
The subject of this question is to calculate the total cost of a vehicle, including the balloon payment, when Walter purchased a 2010 model sedan. To find the total cost we need to calculate the sum of all monthly payments and the final balloon payment. Walter's monthly payment is $199 for 48 months, which amounts to $199 × 48 = $9,552. The remaining balance, which is the initial price minus the sum of the monthly payments, is then subject to an interest of 6%. This balance at the end of the 48 months would be the balloon payment that will be due.
However, to determine which option (a-d) correctly reflects this scenario, we need to know the structure of the deal in terms of how interest is applied. If the 6% interest is to be calculated on the unpaid balance, we would need additional details such as the amortization schedule of the loan to accurately calculate the balloon payment. Given the information provided in the query, it is not possible to accurately choose or calculate the final cost including the balloon payment without making assumptions about how interest is computed over the life of the loan and how payments reduce this balance.