9
AssignmentMultiple Choice

Credit and Loans

Question 9 • 2027 Ignite Financial Literacy-Personal Finance - EL3403

How does the decision to make a down payment benefit Jordan’s financial situation?

Answer
A
It reduces the loan amount and the monthly payments.
B
It guarantees a higher price if the car is resold.
C
It increases the interest rate offered by the dealership.
D
It ensures the return of the down payment when the loan is fully paid off.

Explanation

A down payment is money Jordan pays upfront toward the car’s purchase price. This means Jordan needs to borrow less, which typically lowers both the amount of each monthly payment and the total interest paid. It does not guarantee a higher resale price or a refund of the down payment.

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