A woman buys a car for $45,000. If the interest rate on the loan is 12%, compounded monthly, and if she wants to make monthly payments of $800 for 3 years, how much must she have for a down payment? Round your answer to the nearest dollar.
A)$29,500
B)$27,103
C)$20,914
D)$19,132
E)$25,050

Question

A woman buys a car for $45,000. If the interest rate on the loan is 12%, compounded monthly, and if she wants to make monthly payments of $800 for 3 years, how much must she have for a down payment? Round your answer to the nearest dollar. ​
A)$29,500
B)$27,103
C)$20,914
D)$19,132
E)$25,050

Quizplus · Accepted Answer

To find the down payment, calculate the present value of the monthly payments using the formula for the present value of an annuity. The monthly interest rate is 1% (12% annually), and the number of payments is 36 (3 years). The present value of the payments is subtracted from the car price to find the down payment.

A Woman Buys a Car for $45,000