Question

Lindsay needs to purchase a car. The car she is planning on purchasing costs $12,000 and she has $2,000 that she will be using as a down payment. She is offered credit terms of 3% APR for a term of 2 years. Please calculate the following:
a. To purchase the car, what is the dollar amount that Lindsay will need to finance? (1 point)

b. In one year, what is the dollar amount of interest that Lindsay will pay on the loan? (1 point)

c. In two years, in order for Lindsay to finally OWN the car, what will the actual cost of the car be in dollars? (2 points) (down payment+amount financed+2 years interest=actual cost of car)

help ;_;

Answer 1

a) To purchase the car, Lindsay will need to finance the dollar amount of $10,000.

b. In one year, the dollar amount of interest Lindsay will pay on loan is $300.

c. In two years, for Lindsay to finally OWN the car, the actual cost of the vehicle will be in dollars, that is (down payment + amount financed + 2 years interest = actual cost of the car) is $12,600.

What is a down payment?

A down payment is an initial payment made upfront for the purchase of an asset, which is being financed by another entity at a stated interest rate.

A down payment reduces the amount that is subject to the loan terms.

Data and Calculations:

Cost of a car = $12,000

Downpayment = $2,000

Car Loan = $10,000

APR = 3%

Interest for two years = $600 ($10,000 x 3% x 2)

Thus, since Lindsay is making a down payment of $2,000 for the car, she will finance $10,000 of the purchase costs.

Learn more about down payments at brainly.com/question/26173748

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