Laura and John qualify for a 6-year car loan with a 9.1% APR or a 3-year...

Laura and John qualify for a 6-year car loan with a 9.1% APR or a 3-year car loan with an 7.5% APR. They found a new 2018 Ford Tundra listed at $49,400. Their combined monthly income is $5800 during surf season, but they know that will drop in the winter. They know they shouldn’t pay more than 10% of their income on car payments.

b. Assuming Laura and John will make payments for the entire life of the loan, how much will they pay monthly for each loan option? Are either of these options within 10% of their monthly income?

c. Assuming Laura and John will make payments for the entire life of the loan, how much will they pay in total for each loan option?

Expert Solution

jeff jeffy answered 1 year ago

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