Question

You (or your parents) purchase a used car for $15,867.00 plus 5.25% sales tax. The down payment is 10% of the total cost and you (or your parents) have an excellent credit rating. Use the table below to determine the principal balance at the start of the loan. Secured Unsecured Credit APR (%) APR (%) Excellent 4.80 5.25 Good 5.15 5.65 Average 5.85 6.20 Fair 7.00 7.65 Poor 8.20 9.15 $15,030.02 $14,721.64 $15,867.00 $14,999.00

Answer 1

Answer:

$15,030.02

Step-by-step explanation:

Given: The cost of the car = $15867.00

Sales tax =  5.25% = 0.0525

Total cost = Cost of the car + sales tax

= $15,867 + $(15,867 x 0.0525)

= $15,867.00 + $833.02

= $16,700.02

The down payment is 10% of 16700.02

10% of the total cost = 0.1 x $16,700.02 = $1,670.00

Principal balance = Total cost - down payment

= $16,700.02 - $1,670.00

= $15,030.02

Thank you.