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Julia purchases a Nissan Sentra. a) The dealer charges for the car include the i

ID: 3141131 • Letter: J

Question

Julia purchases a Nissan Sentra. a) The dealer charges for the car include the invoice price of $26,000, the sales tax of 6.25% of the invoice price, plus a non-taxed fixed license plate fee of $45. What is the total of these charges? b) Her dad makes a down payment on the car. After paying that she has to take out a car loan of $17, 500. If she obtains a loan at 3.5% for 6 years with monthly payments what will her monthly payment be? c) What is the total she will pay on the loan during the 6 years?

Explanation / Answer

a) Invoice price = $26000

Sales tax = 6.25% of invoice price

= 6.25 * 26000 / 100

= $1625

License plate fee = $45

=> Total of all charges = $26000 + $1625 + $45

= $27670

b) Principal P = $17500

T = 6 R = 3.5

=> Interest I = PTR/100

= 17500 * 6 * 3.5 / 100

= $3675

Total amount A = P + I

=> A = 17500 + 3675

=> A = $21175

Number of monthly payments = 6*12 = 72

=> Monthly payment = 21175/72 = $294.1

c) The total she will pay on the loan

= Amount A

= $21175