Question

You can afford a $400 per month car payment. You've found a 5 year loan at 3% interest. How big of a loan can you afford? Round to the nearest cent, do not include the dollar sign.

Answer 1

The big loan can afford for car is $23,280

Step-by-step explanation:

Here we have , You can afford a $400 per month car payment. You've found a 5 year loan at 3% interest. We need to find How big of a loan can you afford .Let's find out:

Let's suppose amount of loan is $x , So, per month he can afford $400 so for 5 year :

5 year = 60 months

⇒ 400 (60)

⇒ $ 24,000

Now , He took a 5 year loan at 3% interest for amount $24,000 i.e.

⇒  $ $24,000 \times 3%$ %

⇒ $720

total amount paid in 5 years - interest amount

= 24,000 - 720

= $ 23,280

The big loan can afford for car is $23,280