21
QuizMultiple Choice

Credits and Types of Loans — Test

Question 21 • Financial Algebra/Mathematics

Tetsuo has decided to purchase a new car. He decides to put 10 percent down and finance the remaining balance. The bank offers Tetsuo a 36 month loan at 6 point 7 1 percent If the car is valued at 32 dollars comma 000 , what will his monthly payments be?

Answer
A
983 point 9 3 dollars
B
688 point 8 8 dollars
C
885 point 4 5 dollars
D
782 point 6 5 dollars

Explanation

Tetsuo puts 10% of $32,000, or $3,200, down, so he finances $28,800. The monthly interest rate is 6.71% ÷ 12, and for 36 monthly payments the loan-payment formula gives about $885.45 per month. Therefore, the correct choice is $885.45.

AI-written and checked against the verified answer.

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