A new-or dealer will give you $ 5.180 for the trade in of your old car - to be u

Question

A new-or dealer will give you $ 5.180 for the trade in of your old car - to be used towards the purchase of a new car- and a 4.8 % loan on the balance of the price. If the monthly payment ends up being $ 379.65 over four years, what is the price of the new car? Let's assume a person has a credit card balance of $ 4400, and that a) no additional charges will be made to the credit card, and b) the person pays the minimum payment of $ 44 each month, and c) the credit card company charges 6 % compounded monthly. How many months will it take to pay off the $4400 ?

Explanation / Answer

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Monthly Payments 379.65 No Monthly Payments 48 Interet rate per annum 4.80% Interet rate per Month 0.40% PVAF @0.4% for 48 months 43.59 Present value of future installments 16,548.94 Resale value of old car     5,180.00 Value of New Car 21,728.94

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