Question

you (or your parents) purchase a new car for $19,725.00 plus 4.75% sales tax. the down payment is $2,175.00 and you (or your parents) have an average credit rating. how much interest is accrued after the first month?

Answer 1

The interest accrued after the first month is $65.44.

Step-by-step explanation:

To calculate the amount of interest accrued after the first month, we need to determine the principal amount. The principal amount is the purchase price of the car minus the down payment.

In this case, the principal amount is $19,725.00 - $2,175.00 = $17,550.00.

The interest rate given is 4.75%.

To find the interest accrued after the first month, we use the simple interest formula:

Interest = Principal x Rate x Time

Since the time period is a month, it is equivalent to 1/12 of a year. Substituting the values into the formula, we get:

Interest = $17,550.00 x 0.0475 x (1/12)

= $65.44

Therefore, the interest accrued after the first month is $65.44.