Jim made a down payment of 1000 dollars toward the purchase of a car. To pay the balance of the purchase price, he has secured a loan from his bank at the nominal rate of 7.2 percent per year compounded monthly. Under the terms of his finance agreement, he is required to to make payments of 210 dollars per month for 36 months.
What is the cash price of the car?
How much, in total, will Jim spend on interest charges?
Stacey Warren - Expert brainly.com
Hey! We 've verified this expert answer for you, click below to unlock the details :)
At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga.
Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus.
Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.
I got my questions answered at brainly.com in under 10 minutes. Go to brainly.com now for free help!
I assume the amount he pays each month includes the interest
Total amount he pays to the bank = 210x36 = $7560
Let n be the amount he borrowed.
n x [1+ (7.2% / 12)] ^ 36 = 7560
n x 1.006^36 = 7560
n = calculate it yourself..
cash price of the car = down payment + n = 1000 +n =do it yourself
interest charge = 7560 -n = do it yourself :P
Got the wrong answer :(
According to your equations, n = 6095.29, price = 7095.29, and interest charge = 1464.71
But that's incorrect. Any other ways to solve please?
Not the answer you are looking for? Search for more explanations.
Does the payment include the interest?
I'm not sure but that's all the info they've given us
The other 'way' I could think of it that the payment does not include the interest
amount he borrowed = amount he pays = 210x36 = 7560
cash price = amount borrowed + down payment = work it out
Interest = amount he borrowed x [1+ (7.2% / 12)] ^ 36 = 7560 x 1.006^36 = calculate it
Try and see if you can get the answer..
Sorry Interest = amount he borrowed x [1+ (7.2% / 12)] ^ 36 - 7560= 7560 x 1.006^36 -7560 = calculate it
Both answers are still incorrect..
If the cost of the car is ($ 6781.06 + initial down payment of 1000) = 7781.06, then I will post my work.
Yeah that's right!
Well, I'll post my work but first have to say that the formula used is one I've not seen before in math class but found on a website for car dealers.
That said, hold on, and I'll post the work.
x is the amount financed and does not include the $1000 down payment.
210 = x(.072/12)/(1 - (1+.072/12)^-36)
Over at the Wolfram calculator, x was found to be $ 6781.06. Add the $1000.00 to get $ 7781.06 --> total cost of car. (We still have the interest to figure.)
You can see the "wolf work" at this link: http://www.wolframalpha.com/input/?i=210+%3D+x%28.072%2F12%29%2F%281+-+%281%2B.072%2F12%29%5E-36%29
Now, we'll try to get the interest on $6,781.06 at 7.2% for 36 months with payments of $210 per month. I'll check for one of the auto dealer formulas.
Thanks a lot :) :)
So far, I have not been able to find the total interest. It's not a simple interest type thing but some type of amortization.
There has to be a formula because these online calculators use those algorithms to make the calculators work.
The total amount of interest paid is $778.94.
I'll continue to look for a crank it out formula.