You purchase a used sports utility vehicle costing $30,000 by taking out a 9% add-on installment loan. The loan requires a 15% down payment and equal monthly payments for 5 years. How much are your monthly payments?

Question

Quizplus · Accepted Answer

The correct answer is A.The down payment is 15% of $30,000, which is $4,500. The amount financed is $30,000 - $4,500 = $25,500. The add-on interest is 9% of $25,500, which is $2,295. The total amount of the loan is $25,500 + $2,295 = $27,795. The monthly payments are $27,795 / 60 = $616.25.

You Purchase a Used Sports Utility Vehicle Costing $30,000 by Taking