Question

Trevor is making payments on a car that costs 26,555 dollars. He makes 36 equal payments. If he rounds the equal payments up to the nearest whole dollar, about how much will he overpay after 36 months? Explain.

Answer 1

$13 overpayment

Explanation:

We can find the amount Trevor should pay each month by dividing the $26,555 by 36 months:

($26,555/(36 months)) = $737.64 per month

Since Trevor decide to round up to the nearest dollar, he will pay $738 each month. That's an overpayment of $0.361 each month.

After 36 months of overpaying by $0.361 each month, Trevor will have overpaid:

($0.36/month)*(36 months) = $13 overpayment