Question

URGENT!!!!!! URGENT!!!! WILL MARK AS BRAINLIEST!!!! Benjamin considers purchasing a car for $35,000. He has been approved for a 6-year loan for $30,000 with an interest rate of 5.25%. He also has the option to lease the car for $600 per month for 6 years with a $2,500 down payment. Using the loan amortization formula, how much money does Benjamin save over the 6 years if he purchases the car? Do not consider the future value of the car in your answer. Enter your answer as a dollar amount, such as: $4253

Answer 1

Answer: $1250

Step-by-step explanation:

Given data:

Cost of car = $35,000

Down payment made = $2500

Interest rate = 5.25%

Duration of loan = 6 years

Loan Amount = $3000

Solution:

I = prt/100

where

I = interest

p = principal ($30,000)

r = 5.25%

t = 6

I = $30,000 * 5.25 * 6 /100

= $9450

interest payable on the loan in 6 years is $9450.

Rental

=$600 monthly * 6(12)

= $43,200

Amount made from renting the car is $43,200.

• Money saved by Benjamin in 6 years

= $43,200 – $32500 + $9450

= $43,200 – $41,950

= $1250

Benjamin would have saved $1250 in 6 years.