Tom is going to buy a new Toyota Mercury for 18800 After a 5

Tom is going to buy a new Toyota Mercury for $18800. After a 5% down-payment the dealership will offer a loan for the remaining value of the car at 5.5% APR for 5 years. Round all answers to the nearest dollar.

Use a bank web site to find some of the answers here.

(1) How much will Tom have to have for a down-payment?--------------------- $

(2) How much money is Tom going to borrow for the car?----------------------- $

(3) How much will Tom have to pay per month for 5 years? $--------------------- per month

(4) How much will Tom actually pay for the car?--------------------------- $

Don\'t forget the Down Payment.

(5) How much of this last answer is the interest payed on this loan?------------------ $

Solution

1) Tom have to have for a down-payment is 5% of 18800 =$940

2) Remaining money is = 18800- 940 =17860

4) downpayment =940

now Compound intersest for 5 years on 17860 is 5482

Hence total amount for car =940 + 17860+5482 =24282

5)Interest for 5 years is 5482