Ashley saved $5,000 for a down payment on a new car. If she budgets $250 a month for a five-year loan at 4% APR, how much can she spend on a new car?
(Round to the nearest whole number.)

Question

Quizplus · Accepted Answer

The correct answer is A.Ashley can spend $18,575 on a new car.Explanation:The total amount of interest Ashley will pay over the five-year loan is $5,000 * 0.04 * 5 = $1,000.The total amount of money Ashley will pay back over the five-year loan is $5,000 + $1,000 = $6,000.The total amount of money Ashley can spend on a new car is $6,000 + $5,000 = $18,575.

Ashley Saved $5,000 for a Down Payment on a New