Question

A used car is priced at $2,695. If you borrow the money for the car, your payments will be $122 a month for 30 months. How much will you save by paying cash? A. $333 B. $1,075 C. $965 D. $233

Answer 1

Answer: $965

Step-by-step explanation:

The used car is priced at $2,695.

If you borrow the money for the car, your payments will be $122 a month for 30 months. This means that the total amount of money that you would have paid at the end of 30 months at a rate of $122 per month is the amount paid per month multiplied by the total number of months. It becomes

Total payment = 122×30 = $3660

This means that you ended up paying higher than you would have paid if you paid cash.

Amount that you would have saved = amount paid over 30 months - cost of the car

Amount that you would have saved

= 3660 - 2695 = $965