a) Mark Green is considering buying a new Honda Accord. The purchase price of th
ID: 2785816 • Letter: A
Question
a) Mark Green is considering buying a new Honda Accord. The purchase price of the car is $21,000 but Mark has a trade-in worth $4500. Mark needs a loan to buy the car and knows that his local bank requires him to put down 10% of the purchase price after the value of the trade-in is considered. Mark also knows that bank will charge 800 for the loan and require monthly payments over the next 4 years. What is the minimum down payment that Mark can make? Answer: $1,650 b) Mark Green is considering buying a new Honda Accord. The purchase price of the car is $21,000 but Mark has a trade-in worth $4500. Mark needs a loan to buy the car and knows that his local bank requires him to put down 10% of the purchase price after the value of the trade-in is considered. Mark also knows that bank will charge 8% for the loan and require monthly payments over the next 4 years. If Mark makes the minimum down payment on the car, what is the amount of the loan that Mark will receive? Answer: $14,850 c)Mark Green is considering buying a new Honda Accord. The purchase price of the car is S21,000 but Mark has a trade-in worth S4500. Mark needs a loan to buy the car and knows that his local bank requires him to put down 10% of the purchase price after the value of the trade-in is considered. Mark also knows that bank will charge 800 for the loan and require monthly payments over the next 4 years. What is the size of Mark's monthly payments if he makes the minimum down payment on the car? Answer: S353.50 d)Mark Green is considering buying a new Honda Accord. The purchase price of the car is S21,000 but Mark has a trade-in worth S4500. Mark needs a loan to buy the car and knows that his local bank requires him to put down 10% of the purchase price after the value of the trade-in is considered. Mark also knows that bank will charge 8% for the loan and require monthly payments over the next 4 years. Mark's monthly payments are 353.50 per month. What is Mark's total finance charge if he takes the full 4 years to pay off the loan? Answer $2,488Explanation / Answer
1
Purchase price 21000
Trade In -4500
Net price 16500
Down payment required 16500*10%=1650
2
Loan required=16500-1650=14850
3
Monthly payment required=PMT(8%/12,4*12,-14850)=362.53
4
Total finance charge=362.53*12*4-14850=2551.44
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