cons30s vehicles - loans

TAKING OUT A LOAN TO PURCHASE A VEHICLE

A common way to purchase a vehicle it to take out a loan from a bank.

Some people put a down payment on the cost of the vehicle, and then borrow the rest.

EX You want to take out a loan for $17,500 to buy a vehicle. Your monthly payment is $405 for a four­year loan.

a) What is your TOTAL amount paid?

b) What is the FINANCE (interest) charge?

EX You make a down payment of $4,500 on a new car, which you bought for $24,605. To finance the rest of the cost, you take out a three­year loan at a fixed interest rate of 7.75%.

a) What is the principle of the loan?

b) Find the monthly payment. (pg.59)

EX You make a down payment of $4,500 on a new car, which you bought for $24,605. To finance the rest of the cost, you take out a three­year loan at a fixed interest rate of 7.75%.

c) Find the total paid for the loan.

d) What is the finance charge?

EX You make a down payment of $4,500 on a new car, which you bought for $24,605. To finance the rest of the cost, you take out a three­year loan at a fixed interest rate of 7.75%.

e) Find the total cost of the vehicle, including her own down payment.

HOMEWORKpg.182; #1­8