Use the following to answer questions 31-33 You want a new car. At the dealershi

Question

Use the following to answer questions 31-33 You want a new car. At the dealership, you find a car that you like. The dealership gives you two payment options: 1. Pay $23,000 in cash for the car today...OR 2. Pay $370.41 at the end of each month for six years at 5% (0.41667% monthly for 72n). How much CASH (in total) will you end up paying if you choose to make monthly $ payments for the car? 31, 32. $How much interest (in total) will you pay if you choose to make payments instead of paying cash for the car today? 33. SHow much interest has accrued by the time the first car payment is due (round to two decimal places)?

Explanation / Answer

31. Total cash to be paid if monthly payments for the car is selected.

Total Cash= $370.41 * 72 =$26,669.52

32. Interest to be paid = $26,669.52 - $23,000 = $3669.52

33. Interest accrued by the time the first car payment is due = $23000*0.41667 = $95.83

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