Question

Her monthly payment, if she is considering a three-year loan is $373.47 given the cost of the motorcycle to be $14000 if the tax rate is 6.75%, the total cost plus tax is expressed as: final cost = 14000 (0.0675 * 14000) cost of motorcycle = 14000 945 cost of motorcycle = $14945 if she plans to make a down payment of $1,500 before the sales tax is applied, then; balance = 14945 - 1500 balance = $13,445 if she considers a three-year loan, her monthly payment will be ; monthly payment = 13,445/36 monthly payment = $373.47 hence her monthly payment if she is considering a three-year loan is $373.47

Answer 1

The student demonstrated the application of principles in financial mathematics to calculate monthly loan payments for a motorcycle after considering the total cost with tax and down payment.

Step-by-step explanation:

The calculation of monthly payments for loans based on the principal amount, interest rates, and loan term is a fundamental application of mathematics, specifically in the area of financial mathematics. In the scenario described, the student applies the concept by calculating the final cost of a motorcycle after tax, subtracting the down payment, and then distributing the remaining balance over a three-year loan period to find a monthly payment of $373.47. Examples provided also discuss other loan scenarios, such as the total cost of a million-dollar house loan over 30 years, the effect of larger payments on time and total cost of a loan, and determining the maximum loan one can afford based on annual payments and interest rates.