Answer:
The total cost of the car after five years is $27,250.20.
Explanation:
To calculate the total cost of the car after five years, we need to consider the down payment, the loan amount, and the interest paid over the loan term.
Loan amount: The loan amount is the purchase price minus the down payment. Loan amount = Purchase price - Down payment Loan amount = $23,725 - $2,225 Loan amount = $21,500
Monthly interest rate: Convert the annual interest rate to a monthly rate. Monthly interest rate = Annual interest rate / 12 Monthly interest rate = 9.75% / 12 Monthly interest rate = 0.8125%
Total interest paid: Multiply the monthly payment by the number of months and subtract the loan amount. Total interest paid = (Monthly payment * Number of months) - Loan amount Total interest paid = ($454.17 * 60) - $21,500 Total interest paid = $27,250.20 - $21,500 Total interest paid = $5,750.20
Total cost of the car: Add the loan amount and the total interest paid. Total cost of the car = Loan amount + Total interest paid Total cost of the car = $21,500 + $5,750.20 Total cost of the car = $27,250.20
Therefore, the total cost of the car after five years is $27,250.20.