Hasan wants to purchase a car. He reviewed his budget and can comfortably afford a car payment of $325 per month. He has good credit and anticipated being able to secure a 5-year loan at 3% interest. What is the maximum cost he should pay for a car to stay within his budgeted monthly amount?

Question

Quizplus · Accepted Answer

The correct answer is A because the maximum cost of the car should be $18,083 to stay within the budgeted monthly amount of $325. This is calculated using the formula:Loan Amount = Monthly Payment * (1 - (1 + Interest Rate)^(-Number of Months)) / Interest RateLoan Amount = $325 * (1 - (1 + 0.03)^(-60)) / 0.03Loan Amount = $18,083

Hasan Wants to Purchase a Car