Problema Solution
Reg has just purchased a new car. The car had a list price of $22,499, and he was responsible for 7.96% sales tax, a $2,138 vehicle registration fee, and a $262 documentation fee. Reg’s financing has an interest rate of 10.27%, compounded monthly, and a duration of three years. If Reg makes a monthly payment of $773.89, which of the following was his down payment? Round all dollar values to the nearest cent.
Answer provided by our tutors
22499Car price
" X 1.0796Sales tax
" + 2138Car rego fee
" + 262Doc fee
= 26689.92Total car cost
773.89Payment/month
" X 3 X 12Number of months in three years
=27860.04How much Reg pays for the car (other than down payment)
26689.92 X 0.0127^36Interest Reg pays on the car for 36 months
= 15349.47
Car cost + interest = Downpayment + Reg monthly payments
Downpayment = Car cost + interest - Reg monthly payments
= 26689.92 + 15349.47 -27860.04
=14179.35
Downpayment is $14,179 and 35 cents.