Question

You (or your parents) are debating about whether to buy a new car for $19,072.00 or a used car for $15,635.00. Sales tax is 4.5%. You (or your parents) plan to make a down payment of $1,200.00 and your credit rating is fair. Use the table below to determine the difference in interest accrued by the end of the first month.
Secured Unsecured
Credit APR (%) APR (%)
Excellent 4.80 5.25
Good 5.15 5.65
Average 5.85 6.20
Fair 7.00 7.65
Poor 8.20 9.15

Answer 1

Answer:

The correct answer is $20.95

Step-by-step explanation:

Answer 2

            Secure      Unsecured
Credit   APR           APR
FAIR      7.00           7.65
 
                                  Brand new            Used Car
Purchase Price:      19,072                   15,635
Sales Tax 4.5%      
(price x 4.5%)                858.24                   703.58
Total price                19,930.24               16,338.58
Downpayment          (1,200.00)              (1,200.00)
For financing           18,730.24                15,138.58

Interest: Brand New:
Secured : 18,730.24 * 7% * 1/12  = 109.26
Unsecured: 18,730.24 * 7.65% * 1/12 = 119.41

Interest: Used Car
Secured: 15,138.58 * 7% * 1/12 = 88.31
Unsecured: 15,138.58 * 7.65% * 1/12 = 96.51