Question

Valerie is going to purchase a new car. The car she wants has a list price of $32,495. Valerie is planning to make a down payment of $1,877. Furthermore, she plans to trade in her current car, which is a 2006 Hyundai Sonata in good condition. She will finance the rest of the cost by making monthly payments over five years. She can finance the cost at a rate of 8. 64%, compounded monthly. She will also have to pay 8. 23% sales tax, a $2,243 vehicle registration fee, and a $314 documentation fee. If the dealer gives Valerie 87. 5% of the trade-in price on her car, listed below, approximately how much will Valerie pay in total for her new car? (Round all dollar values to the nearest cent, and consider the trade-in to be a reduction in the amount paid. ).

Answer 1

Valerie will pay $ 35,899.87 as the total cost of financing for the purchase of the new car which includes 60 loan payments amounting to $ 2,698.57 and the total loan interest is $513.57

What is the total cost of financing?

The actual money you borrow in addition to the interest that you will have to pay is called the total cost of financing.

In this case, the Auto price is given $32,495

$\rm loan\,term = \, 60\,months\,(12\times5)\\\\Interest\,rate =8.64\%\\\\Down\,payment = \ 1,877\\\\Trade\,in\,value = \ 28,433 ( 32,495\times87.5\%)\\\\\rm\, Sales\,tax = 8.23\%\\\\Title\,,registration\,and\,other\,fees = 2,557( \ 2,243+ \ 314)\\\\Monthly pay : 44.98\\\\\rm\,Total\,loan\,amount = 2,185\\\\\rm\,Sales\,tax = 334.30\\\\\rm\,Upfront Payment = 4,768.30$

A total of 60 loan payments is equal to $2,698.57, the total loan interest is equal to $513.57, and the total cost (price, interest, taxes, fees ) is equal to $35,899.87

Thus, Valerie has to pay $35,899.87 as the total amount for the purchase of the car.

To learn more about the total cost of financing, refer to the link:

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