SOLUTION
Since you can afford a down payment of $2,500, the remaining money needed to purchase the car becomes
Now, we will find the simple interest on $17,500 for 48 months, which is 4 years. This becomes
(a) What will your monthly payment be? $
We will add this interest to the $17,500 and divide by 48 months to get the monthly payment. This becomes
Hence, the answer is $422.92
(b) How much will you pay in total for the car? $
To get this, we add the $20,300 (that we divided by 48 months), to the initial down payment made. This becomes
Hence, the answer is $22,800
(c) How much will you pay in interest over the life of the loan? $
We have initially found the interest as 2,800 dollars.
Hence the answer is $2,800
