Mark Green is considering buying a new Honda Accord. The purchase price of the car is $21,000 but Mark has a trade-in worth $4,500. Mark needs a loan to buy the car and knows that his local bank requires him to put down 10 percent of the purchase price after the value of the trade-in is considered. Mark also knows that bank will charge 8 percent for the loan and require monthly payments over the next 4 years.
-If Mark makes the minimum down payment on the car,what is the amount of the loan that Mark will receive?

Question

Quizplus · Accepted Answer

The purchase price is $21,000, and the trade-in is worth $4,500, so the net price is $21,000 - $4,500 = $16,500. Mark needs to put down 10% of $16,500, which is $1,650. Therefore, the loan amount is $16,500 - $1,650 = $14,850.

Mark Green Is Considering Buying a New Honda Accord