Question

Derek bought a new car for $32,000. He made a down payment of $17,000 and financed the balance through the car dealer. He was unable to make the first monthly payments. Until he makes a payment he is paying 2% interest per month on the balance

Answer 1

Answer:

$300

Step-by-step explanation:

Given that:

Derek bought a new car for $32,000;

The original amount of purchase = $32,000

Down payment =  $17,000

Remaining amount = Original amount of purchase - Down payment

= $(32000 -17000)

= $ 15,000

Also;

rate of interest per month is 2%

and the Derek is unable to pay his first monthly payment

thus the interest amount is calculated on principal amount

so for the first month interest is calculated on total principal amount

The month interest payment is then calculated as :

= 15,000 × 2%

= 15,000 × 0.02

= $300