Question

8. You (or your parents) purchase a new car for $19,725.00 plus 4.75% sales tax. The down payment is $2,175.00 and you (or your parents) have an average credit rating. How much interest is accrued after the first month?
(1 point)
$ .
i honestly have no idea help?

Answer 1

i think there is some missing information here, whats the interest rate for someone with an average credit rating?

Answer 2

average: secured: 5.85% and for unsecured it is 6.20%

Answer 3

ok is this situation secured or unsecured?

Answer 4

http://en.wikipedia.org/wiki/Secured_loan

Answer 5

secured

Answer 6

why is it secured?

Answer 7

i honestly dont know

Answer 8

seems to me it would be unsecured

Answer 9

yeah that is what im starting to think that it has to be unsecured

Answer 10

oh wait no nvm, i think it is secured, the collateral is the car, my bad

Answer 11

ok so lets assume its secured

Answer 12

ok

Answer 13

first need to figure out the total amount paid for the new car, how much would that be including tax?

Answer 14

$19,725.00 plus 4.75% sales tax.

Answer 15

yes so whats the total dollar amount, including tax?

Answer 16

by the way lets assume that taxes are included in financing

Answer 17

$19,729.75 is the total dollar amount

Answer 18

no

Answer 19

how much is sales tax? how do you calculate it

Answer 20

the sales tax is 4.75% it says $19,725.00 plus 4.75% sales tax.

Answer 21

im saying how much is sales tax in dollars

Answer 22

how much is 4.75% of 19725

Answer 23

i have no idea

Answer 24

ok so when you see the word "of", that should indicate multiplication

so 4.75% times 19725

or 4.75% multiplied by 19725

Answer 25

can you convert 4.75% into a decimal?

Answer 26

ok so i multiplied 4.75% and 19725 and i got 93,693.75

Answer 27

thats close, but we can think that a percentage less than 100% will be smaller than the original number, so we know thats incorrect

Answer 28

turn your percent to a decimal, then multiply

Answer 29

to convert 4.75% into a decimal you divide 4.75 by 100

Answer 30

0.0475

Answer 31

correct

Answer 32

now multiply that number by 19725

Answer 33

936.9375

Answer 34

perfect, so that is your interest in dollars, it has fractions of a penny included, but leave those for now, we will round at the end if necessary

Answer 35

so now total = 19725 + interest in dollars = ?

Answer 36

20,661.9375

Answer 37

perfect

Answer 38

so now we take that number and subtract the down payment, because that is how much we are paying initially, so we wont have to pay interest on the entire 20661.9375

Answer 39

so what is the total 20661.9375 minus the down payment?

Answer 40

18,486.9375

Answer 41

perfect, now we know the interest rate is 5.85% per month, from what you told me earlier

Answer 42

yes

Answer 43

what is 5.85% of 18486.9375 ?? use the same process as before

convert percentage to decimal then multiply

Answer 44

108,148.584

Answer 45

no but close, you need to convert 5.58% into a decimal before you multiply

Answer 46

but really you can just now divide what you got by 100 also

Answer 47

108,148.584 divided by 100 is?

Answer 48

1,081.48584

Answer 49

correct, so now we want to round down or up, im not sure how the bank would round but lets assume, up, so rounded up to the nearest penny, we have $1081.49, that is your answer

Answer 50

ok thank you for your help

Answer 51

yw