22
RCMultiple Choice

Using Graphs to Advertise — Cumulative exam

Question 22 • FowU - Financial Math - B

Reg has just purchased a new car. The car had a list price of $22,499, and he was responsible for 7.96% sales tax, a $2,138 vehicle registration fee, and a $262 documentation fee. Reg’s financing has an interest rate of 10.27%, compounded monthly, and a duration of three years. If Reg makes a monthly payment of $773.89, which of the following was his down payment? Round all dollar values to the nearest cent. (Note: The sales tax is applied to the full list price of the car as there is no trade-in or discount)

Answer
A
$2,000
B
$2,200
C
$2,500
D
$2,800

Explanation

First find the car’s total cost: sales tax is $22,499 × 0.0796 = $1,790.92, so the price plus tax and fees is $22,499 + $1,790.92 + $2,138 + $262 = $26,689.92. At a monthly rate of 10.27% ÷ 12 for 36 months, payments of $773.89 have a present value of about $23,889.80, which is the amount financed. Subtracting this from the total cost gives a down payment of about $2,800.12, so the best answer is $2,800.

AI-written and checked against the verified answer.

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