You (or your parents) purchase a new car for $16,725.00 plus 6.15% sales tax. The down payment is $1,400.00 and you (or your parents) have an average credit rating. How much interest is accrued after the first month?
Average Credit score APR (%)-
Secured =5.85% Unsecured= 6.20%
To calculate the interest accrued after the first month, we need to know the loan amount and the annual interest rate. From the given information, we can determine the loan amount by subtracting the down payment from the total purchase price:
Loan amount = Purchase price - Down payment
Loan amount = $16,725.00 - $1,400.00
Loan amount = $15,325.00
Now, we need to determine the annual interest rate. Since the credit rating is average, we will use the higher rate of 6.20%.
To find the monthly interest rate, we divide the annual interest rate by 12 (the number of months in a year):
Monthly interest rate = Annual interest rate / 12
Monthly interest rate = 6.20% / 12
Monthly interest rate = 0.0517
Finally, to calculate the interest accrued after the first month, we multiply the loan amount by the monthly interest rate:
Interest accrued = Loan amount * Monthly interest rate
Interest accrued = $15,325.00 * 0.0517
Interest accrued = $793.01
Therefore, the interest accrued after the first month would be approximately $793.01.