Question

Larry is getting a loan to buy a car. The loan will be for $18,000 and will be paid off over 4 years. One bank offers him an annual interest rate of 6%, which would make his payments $422.73. Another bank offers him an annual interest rate of 8%, which would make his monthly payments $439.43.

What is the overall financial benefit for Larry of taking the 6% loan?

Answer 1

@jim_thompson5910

Answer 2

The answer to this is fairly obvious isn't it?

Answer 3

no it isnt can you help

Answer 4

Subtract the price Larry would have to pay if he chose the 8% interest rate from the amount he would have to pay if he chose the 6% interest rate

Answer 5

The problem seems to be asking you to calculate the total amount paid in each case and then showing by subtraction how much is saved by opting for one over the other.

Answer 6

ok

Answer 7

what do i subtract

Answer 8

We may have to make an assumption here: that the payments are MONTHLY payments. How many payments would that come to per year? How many payments, total?

Answer 9

Please show your work. In each of the 2 cases, what is the total repaid?
Subtract the smaller from the larger.

Answer 10

OpenStudy says you're "just looking around." If you'd like to arrive at a final answer, I'll need your immediate participation.

Answer 11

18000/4 = 4500

Answer 12

Have you calculated the total of payments in each case? If so, I need to see your work.
Why divide 18000 by 4? As before, you need to subtract the smaller sum from the larger sum.

Answer 13

OpenStudy again tells me that you're "just looking around." Without your participation, I can't help much. Perhaps I'll see you later, whenever you choose to focus on this problem solution.

Answer 14

im not lookin around im thinkin

Answer 15

6% of 442.73 = 26.5638