Question

If I buy a car for $630 and it is financed with monthly payments of $75 at an interest rate of 12% how many total dollars will I have spent on it?

Answer 1

I got $705.6.

Answer 2

You there?

Answer 3

Hey sorry about that, how'd you come to it... Future value?

Answer 4

630 * .12

Answer 5

You get 75.6

Answer 6

75.6 + 630 = 705.6

Answer 7

Even if it is compounded monthly at 12%?

Answer 8

This could get complicated ... but I suspect that you're supposed to assume a 12% annual interest rate?

Answer 9

No, monthly interest

Answer 10

Hmmm - So you borrow$630 and have to pay 12% interest on that - which is $705.60. Then you pay $75 off leaving you owing $630.60. You'll never pay it off as you now owe more than you borrowed! There's something we're missing here!