(Cash Versus Financing LC)

A college student is buying a used car for $10,000. The student can either pay in full with cash from savings, or finance the car for 60 months at a monthly compounding interest rate of 4.25%, which results in a monthly payment of $206.05. How much more is paid over the life of the loan versus paying in cash?

$1,030.25
$11,030.25
$2,363.00
$12,363.00

Question

(Cash Versus Financing LC)

A college student is buying a used car for $10,000. The student can either pay in full with cash from savings, or finance the car for 60 months at a monthly compounding interest rate of 4.25%, which results in a monthly payment of $206.05. How much more is paid over the life of the loan versus paying in cash?

$1,030.25
 $11,030.25
 $2,363.00
 $12,363.00

Phantomdex · Answer

The student pays $2,363 dollars more if they finance the car instead of paying in cash. This is calculated by finding the total amount paid over the life of the loan and subtracting the cash price.

Phantomdex · Answer

I can explain more if you'd like!

TheJag18 · Answer

sorry. its good :)

Phantomdex · Answer

Alrighty