You are buying a previously owned car today at a price of $6,890. You are paying $500 down in cash and financing the balance for 36 months at 7.9%. What is the amount of each loan payment?

Question

Quizplus · Accepted Answer

To calculate the loan payment, first we need to determine the loan amount:

Loan amount = Purchase price - Down payment
Loan amount = $6,890 - $500
Loan amount = $6,390

Next, we can use a loan payment calculator or formula to calculate the monthly payment.

Using a loan payment calculator, entering a loan amount of $6,390, a loan term of 36 months, and an interest rate of 7.9%, we get a monthly payment of $199.94.

Therefore, the best choice is B, with a monthly loan payment of $199.94.

You Are Buying a Previously Owned Car Today at a Price