Question

Car Payments

Your aunt bought a new car After three months of car payments she owed a total of

$22 275 to the bank for the car loan. After 12 months, she owed $18,900 to the bank

for the car loan What was her average payment rate on the principal of the car loan

during this time?

13. 22.2757

(12, 18,000)

24,000

20,000

Money Owed 16,000

(dollars)

12.000

8,000

4,000

2

12

4 6 8 10

Time months)

CHECK

per month

O

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What was her average payment rate on the principal of the car loan during this time?

Answer 1

$375

Explanation:

Given the following :

Amount owed after three months of payment = $22,275

Amount owed after 12 months = $18,900

What was her average payment rate on the principal of the car loan during this time?

We can obtain the amount paid between the third month and the 12th months ;

(Amount owed after 12 months - amount owed after 3 months)

= ($22,275 - $18,900)

= $3,375

Number of months for which the payment above was made :

(12 - 3) = 9 months

Payment per month :

Amount paid / number of months

= 3375 / 9

=$375 per month