Sammi purchased a used car costing $30,000 by taking out 3.5% add-on loan. The loan requires an 18% down payment and equal monthly payments for 5 years. How much are his monthly payments?

Question

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The correct answer is A.The down payment is 18% of $30,000, which is $5,400. The amount financed is $30,000 - $5,400 = $24,600. The add-on interest is 3.5% of $24,600, which is $861. The total amount to be repaid is $24,600 + $861 = $25,461. The monthly payments are $25,461 / 60 = $481.75.

Sammi Purchased a Used Car Costing $30,000 by Taking Out