Bethany purchased a $35,000 car three years ago using a 6 percent, 5-year loan. She has decided that she would sell the car now, if she could get a price that would pay off the balance of her loan. What is the minimum price Bethany would need to receive for her car?
A) $9,680,67
B) $15,267.12
C) $22,242.11
D) $23,429.19

Question

Quizplus · Accepted Answer

To find the minimum price Bethany would need to receive for her car to pay off the balance of her loan, we can calculate the remaining balance of a 5-year loan at 6 percent interest after 3 years. Using the formula for the remaining balance of an amortizing loan or an amortization calculator, we find that the correct answer is $15,267.12. This accounts for the principal and interest payments made over the first three years, reducing the initial loan amount.

Bethany Purchased a $35,000 Car Three Years Ago Using a 6