Question

Smart Touch Learning purchased a car for $ 110000. The sales tax on the car was $ 1600​, a dealer fee of $ 310 was charged on the​ sale, and Smart Touch Learning paid $ 700 for painting and lettering the car. After the​ purchase, Smart Touch Learning paid $ 460 for auto insurance on the car for the next twelve months. What is the cost of the​ car?

Answer 1

The total cost of the car purchased by Smart Touch Learning is $112,610, which includes the purchase price, sales tax, dealer fee, and painting and lettering costs.

Step-by-step explanation:

The cost of the car for Smart Touch Learning is calculated by adding the initial purchase price of the car with all other fees and costs associated with the purchase. This includes the sales tax, dealer fee, painting and lettering costs, and the auto insurance for the first twelve months. Therefore, the total cost is calculated as follows:

• Purchase price of the car: $110,000
• Sales tax on the car: $1,600
• Dealer fee: $310
• Painting and lettering: $700

While the auto insurance has also been paid, it is generally not included in the acquisition cost of an asset. It's considered an ongoing operational cost. Therefore, it should not be included in the total cost of the car purchase.

Adding up the purchase price, sales tax, dealer fee, and painting and lettering, we get:

Total cost of the car = $110,000 + $1,600 + $310 + $700 = $112,610