10
QuizMultiple Choice

Buying vs Leasing a Car — Quiz

Question 10 • Financial Algebra/Mathematics

Makai wants to buy a new car and borrow $15,000 to finance it. The car dealership offers different annual interest rates based on the buyer's credit score. Credit score of 720 or higher: 3% annual interest rate Credit score between 690 and 719 : 5% annual interest rate Credit score between 660 and 689 : 7% annual interest rate Credit score below 660 : 10% annual interest rate Makai's credit score is 705 What will be the total amount of interest paid over a 4 -year loan period?

Answer
A
2 dollars comma 000
B
$3,000
C
4 dollars comma 000
D
1 dollars comma 200

Explanation

A credit score of 705 falls between 690 and 719, so Makai’s annual interest rate is 5%. Using simple interest, interest = principal × rate × time: $15,000 × 0.05 × 4 = $3,000. Therefore, the total interest paid is $3,000, choice D.

AI-written and checked against the verified answer.