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QuizMultiple Choice

The Cost of Credit — Quiz

Question 1 • Personal Finance

The table shows a schedule of Evita’s payment plan for a used car. Evita’s Payment Plan for the First Three Years Year Balance Monthly Payment End of Year Balance 1 356 point 8 2 dollars 2 356 point 8 2 dollars 3 356 point 8 2 dollars 8 dollars comma 563 point 3 9 Evita paid 2 dollars comma 408 point 9 1 in interest. What was the selling price of the car?

Answer
A
21 dollars comma 408 point 9 1
B
17 dollars comma 127 point 0 7
C
12 dollars comma 845 point 5 2
D
19 dollars comma 000 point 0 0

Explanation

Evita made 36 monthly payments of $356.82, for a total of 36 × $356.82 = $12,845.52. Subtract the $2,408.91 she paid in interest to find that she repaid $10,436.61 of the car’s price. Adding the $8,563.39 balance remaining gives a selling price of $19,000.00, choice D.

AI-written and checked against the verified answer.

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