Final answer:
In relation to purchasing a new car and managing finances, the correct answer is the 'no debt' solution which involves making purchases within your means and paying off credit card bills in full each month. The correct option is c.
Step-by-step explanation:
When considering how much money to spend on the purchase of a new car, it is important to consider how your choices affect your spending on other needs. The no debt solution limits your purchases to what you can afford to pay off when your credit card bill arrives each month.
Understanding Loans & Interest, Home Loans, Auto Loans, and Insurance is crucial because many people fall into the trap of buying cars and houses they cannot truly afford. This can lead to financial difficulties and property repossession.
When you buy a car, deciding on the affordability involves assessing how much monthly income you can allocate to car payments, considering interest rates on auto loans, and taking into account the length of the loan term to minimize financial strain.
Paying off credit card debts promptly avoids additional interest charges, saving you money in the long run. The correct option is c.