What is the cash price of the car? How much will Jane spend on interest charges?
Jane made a down payment of 2500 dollars toward the purchase of a car. To pay the balance of the purchase price, she has secured a loan from her bank at the nominal rate of 8.7 percent per year compounded monthly. Under the terms of her finance agreement, she is required to to make payments of 100 dollars per month for 42 months.
What is the cash price of the car?
(answer to nearest cent)
How much, in total, will Jane spend on interest charges?
(answer to nearest cent)
Comments (1)
100=P(.087/12)/(1-(1+.087/12)^-42)=
P=3609.62
3609.62+2500=$6109.62 cash price of the car
4200-3609.62=$590.38 interest charges