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For # 20-24; Samantha is going to purchase a new car for $36,000. She plans to make a 10% down payment with a 60 month (5 year) fixed installment loan with a 6.0% APR. 20. How much is the down payment? 21. How much will Samantha finance? 22. Determine Samantha's monthly payment 23. Determine the total amount Samantha paid. 24. Determine the finance charge.

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For # 20-24; Samantha is going to purchase a new car for $36,000. She plans to make-example-1

1 Answer

10 votes

Answer:

20. $3,600

21. $32,400

22. $626.38

23. $41,182.80

Explanation:

20.

The down payment is 10% of the purchase price, so is ...

amount down = 10% × $36,000 = 0.10 × $36,000

amount down = $3,600

__

21.

The amount financed is the remaining amount due:

$36,000 -$3,600 = $32,400

__

22.

The monthly payment is found from the amortization formula.

A = P(i/12)/(1 -(1 +i/12)^(-12t)) . . . . P is the amount financed at rate r for t years

A = $32,400(0.06/12)/(1 -(1 +0.06/12)^(-12×5))

A = $32,400(0.005)/(1 -(1.005^-60)) ≈ $626.38

Samantha's monthly payment will be $626.38.

__

23.

The total amount paid is ...

total paid = down payment + monthly payment × number of months

total paid = $3,600 +626.38×60 = $41,182.80

The total amount Samantha will pay is $41,182.80.

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