To determine the minimum down payment that the person must make to keep their monthly loan payment at or below $650, we need to calculate the total cost of the loan, including interest, and then subtract the down payment from this amount.
The total cost of the loan can be calculated using the following formula:
Total cost = Loan amount * (1 + Interest rate * Number of years)
Plugging in the values provided, we get:
Total cost = $37,800 * (1 + 0.05 * 4)
= $37,800 * (1 + 0.20)
= $37,800 * 1.20
= $45,360
To keep the monthly loan payment at or below $650, the person must make a down payment of at least $45,360 - $650/month * 4 years * 12 months/year = $45,360 - $31,200 = $14,160.
Therefore, the person must make a minimum down payment of $14,160 in order to keep their monthly loan payment at or below $650.