Question

You have decided to purchase a car for $25,625. The credit union requires a 10% down payment and will finance the balance with a 9% annual interest loan for 36 months. The sales tax in your city is 7.5%, and the license and title charges are $175.13. What is the total purchase price of the car including tax, license, and title? Round your answer to the nearest cent.

Answer 1

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Answer:

total purchase price: $27,722.01

Explanation:

The price of the car plus tax is ...

$25,625 × (1 +7.5%) = $27,546.88

Adding license and title charges brings the total to ...

$27,546.88 +175.13 = $27,722.01 . . . total purchase price

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Additional comment

10% of that, or $2,772.20, will be the required down payment, leaving a balance due of $24,949.81. The payments on a 36-month loan at 9% will be $793.40, for a total loan cost of $28,562.30. Then the full cost of the car, including financing, is $31,334.50. The cost of the financing is $3,612.49.