In: Finance
Ursula wants to buy a $25,000 used car. She has savings of $2,000 plus an $800 trade-in. She wants her monthly payments to be about $395. Which of the following loans offers monthly payments closest to $395?
8.5% APR for 60 months |
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8.5% APR for 72 months |
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8.5% APR for 48 months |
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8.5% APR for 24 months |
Price of car = $25,000
Loan Amount = Price of car - savings amount - Trade-in
= $25,000 - $2,000 - $800
= $ 22,200
Now, Calculating the Monthly Payment under each optionss:-
i). 8.5% APR for 60 months
Monthly Payment in this Option is $455.47
ii). 8.5% APR for 72 months
Monthly Payment in this Option is $394.68
iii). 8.5% APR for 48 months
Monthly Payment in this Option is $547.19
iv). 8.5% APR for 24 months
Monthly Payment in this Option is $1009.12
Hence, In Option 2 which is 8.5% APR for 72 months the Loan will offer monthly payment closest to $395
Option 2
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