You are interested in purchasing a new automobile that costs $33,000. The dealership offers you a special financing rate of (0.75% per month)for 60 months. Assuming that you do not make a down payment on the auto and you take the dealer's financing deal, then your monthly car payments would be closest to ________.

Question

You are interested in purchasing a new automobile that costs $33,000. The dealership offers you a special financing rate of  (0.75% per month)for 60 months. Assuming that you do not make a down payment on the auto and you take the dealer's financing deal, then your monthly car payments would be closest to ________.

Quizplus · Accepted Answer

To calculate the monthly payment, we can use the formula:

Monthly Payment = [P * r * (1+r)^n] / [(1+r)^n - 1]

where P = the purchase price of the car, r = the monthly interest rate (0.0075), and n = the number of months (60).

Plugging in the values, we get:

Monthly Payment = [33,000 * 0.0075 * (1+0.0075)^60] / [(1+0.0075)^60 - 1]
Monthly Payment ≈ $684.78

Therefore, the closest monthly car payment is option B ($685).

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