You (or your parents) purchase a new car for $19,725.00 plus 4.75% sales tax. The down payment is $2,175.00 and you (or your parents) have an average credit rating. How much interest is accrued after the first month?
Credit - Excellent New Car APR (%) - 5.40 Used Care APR (%) - 5.65
Credit - Good New Car APR (%) - 5.95 Used Care APR (%) - 6.36
Credit - Average New Car APR (%) - 6.30 Used Care APR (%) - 6.90
Credit - Fair New Car APR (%) - 7.55 Used Care APR (%) - 7.60
Credit - Poor New Car APR (%) - 9.80 Used Care APR (%) - 10.0
Based on having an average credit rating, the APR for a new car would be 6.30%.
First, we need to calculate the total amount financed:
Total cost of car + sales tax - down payment = $19,725.00 + ($19,725.00 * 4.75%) - $2,175.00 = $20,737.19
Next, we need to calculate the monthly interest accrued:
Monthly interest = (Total amount financed * APR) / 12
Monthly interest = ($20,737.19 * 6.30%) / 12
Monthly interest = $110.44
Therefore, after the first month, the accrued interest on the car loan would be $110.44.