Jana has $1,500 for a down payment and thinks she can afford monthly payments of $300. If she can finance a vehicle with a 7%, 4-year loan from a credit union, what is the maximum loan amount Jana can afford? (Round the answer to the nearest dollar.)
A) $12,528
B) $14,208
C) $16,028
D) $17,900
E) $18,028

Question

Quizplus · Accepted Answer

The monthly payment for a 4-year loan at 7% interest on a loan amount of $x is given by:$300 = (x * 0.07 / 12) * (1 - (1 + 0.07 / 12)^(-48))Solving for x gives x = $12,528.

Jana Has $1,500 for a Down Payment and Thinks She