Answer:
$19,389
Step-by-step explanation:
The amount Riley is being charged for the car is ...
(sticker price) + tax = 16,999 + 0.0625·16,999 = 16,999 +1062.44 = 18061.44
The amount he is paying as a down payment is 10& of this value:
down payment = 10% · $18,061.44 = $1,806.14
Then the amount being financed is ...
financed amount = purchase price - down payment
= $18,061.44 -1,806.14 = $16,255.30
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The amortization formula is good for finding the monthly payment.
A = P(r/12)/(1 -(1 +r/12)^(-12t))
where P is the amount financed at rate r for t years.
A = $16,255.30(0.039/12)/(1 -(1 +0.039/12)^(-12·4)) = $366.30
The total Riley will pay is the sum of the monthly payments and the initial down payment:
total paid = 48·$366.30 +1,806.14 = $19,388.54 ≈ $19,389
The closest offered choice is $19,397.
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<em>Comment on answer choices</em>
We suspect the answer key computation involved some rounding somewhere.
