Question

Dennis has just made the final monthly payment necessary for paying off his car financing. When he purchased the car three years ago, it had a list price of $23,878. Dennis traded in his good-condition 2001 Honda Odyssey and financed the rest of the cost at an interest rate of 11.82%, compounded monthly. The dealer gave Dennis 85% of the trade-in value of his car, listed below. Dennis was also responsible for paying 9.05% sales tax, a $1,474 vehicle registration fee, and a $225 documentation fee. All told, how much did Dennis pay in interest? (Round all dollar values to the nearest cent, and consider the trade-in to be a reduction in the amount paid.)

Answer 1

Dennis paid approximately $9,561.27 in interest on his car financing.

Step-by-step explanation:

To calculate the amount Dennis paid in interest, we first need to find the total amount he financed. The list price of the car was $23,878, and Dennis received 85% of the trade-in value of his Honda Odyssey. Let's calculate the trade-in value: Trade-in value = 85% x $2,000 = $1,700

So, the total amount financed was: Total amount financed = List price - Trade-in value = $23,878 - $1,700 = $22,178

Now, we can use the formula for compound interest to calculate the interest paid: Interest = Total amount financed x (1 + interest rate/number of compounding periods)^(number of compounding periods x number of years) - total amount financed

Plugging in the values: Interest = $22,178 x (1 + 0.1182/12)^(12 x 3) - $22,178

Using a calculator, the interest comes out to be approximately $9,561.27.

Answer 2

$3,919.77

Step-by-step explanation:

I've taken this quiz already. It is a: $3,919.77