The price of a new car is $28,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 8%/year compounded monthly. (Round your answers to the nearest cent.) (a) What monthly payment will she be required to make if the car is financed over a period of 36 months? Over a period of 60 months? 36 months $ 658 60 months $ 425.80 (b) What will the interest charges be if she elects the 36-month plan? The 60-month plan? 36-month plan $ 5675.3 60-month plan $ 10287.38
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The down payment is 25% of the car price, so: Down payment = 0.25 * $28,000 = $7,000 Amount financed = Car price - Down payment = $28,000 - $7,000 = $21,000 Now, let's calculate the monthly payment for both 36-month and 60-month plans. We will use the formula Show more…
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