9
QuizMultiple Choice

Installment Loans

Question 9 • Applications and Modeling

Your friend just purchased a new sports car for $32,000. He received $6,000 for his trade in and he used that money as a down payment for the new sports car. He financed the vehicle at 6.76% APR over 48 months. Determine the amount financed from the given information.

Answer
A
$38,000
B
$32,000
C
$29746.15
D
$26,000

Explanation

The amount financed is the car’s purchase price minus the down payment. Subtract the $6,000 trade-in from the $32,000 price: $32,000 − $6,000 = $26,000. The APR and loan term affect the payments, not the amount initially financed, so the correct choice is $26,000.

AI-written and checked against the verified answer.

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