Chase purchased a $30,000 car three years ago using a 10 percent, 5-year car loan. He has decided that he would sell the car now if he could get a price that would pay off the balance of his loan. What is the minimum price Chase would need to receive for his car? (Assume monthly payments.)
A) $12,000.00
B) $13,813.25
C) $21,500.75
D) $23,739.05

Question

Quizplus · Accepted Answer

To find the minimum price Chase would need to receive for his car to pay off the balance of his loan, we need to calculate the remaining balance of a 10 percent, 5-year car loan after three years of monthly payments. Using the formula for the remaining balance of an installment loan or an amortization calculator, we can determine that the correct answer is $13,813.25. This calculation takes into account the interest accrued over the three years and the principal amount paid down during that time.

Chase Purchased a $30,000 Car Three Years Ago Using a 10