Question

Smart Touch Learning purchased a car for $ 20000. The sales tax on the car was $ 1000​, a dealer fee of $ 200 was charged on the​ sale, and Smart Touch Learning paid $ 500 for painting and lettering the car. After the​ purchase, Smart Touch Learning paid $ 800 for auto insurance on the car for the next twelve months. What is the cost of the​ car?

Answer 1

The cost of the car purchased by Smart Touch Learning, excluding the auto insurance, is $21,700. This includes the initial purchase price, sales tax, dealer fee, and costs for painting and lettering. Auto insurance is considered a separate, recurring expense outside the purchase cost.

Step-by-step explanation:

The student's question is regarding the total cost incurred in the purchase and subsequent expenses of a car by Smart Touch Learning. To calculate the cost of the car, we need to consider the initial purchase price, sales tax, dealer fee, costs of painting and lettering, and any other additional costs directly related to the acquisition of the car. However, recurring expenses such as auto insurance are not typically included in the purchase price of a car. Therefore, the cost of the car would be the sum of the purchase price ($20,000), the sales tax ($1,000), the dealer fee ($200), and the costs for painting and lettering ($500).

The equation to calculate the total cost of the car would be:

Cost of Car = Purchase Price + Sales Tax + Dealer Fee + Painting and Lettering Costs

Cost of Car = $20,000 + $1,000 + $200 + $500

Thus, the cost of the car would be:

Cost of Car = $21,700

It is important to note that while the insurance cost of $800 is indeed a financial commitment associated with owning a car, it does not contribute to the actual purchase cost of the car and is thus not included in this calculation.