Could someone help me answer these!? I feel like no one else will help, and my teachers aren't really any help either.
1) a) You purchase a new car for $16,725.00 plus 6.15% sales tax. The down payment is $1,400.00 and you have an average credit rating. How much interest is accrued after the first month?
Average Secured-5.85 Unsecured- 6.20
1) b) You purchase a new car for $16,725.00 plus 6.15% sales tax. The down payment is $1,400.00 and you have an average credit rating. If you improved your credit score to good and paid $2,100 on your purchase, how much interest could you save in the first month
2) You purchase a used car for $17,645.00 plus 4.75% sales tax. The down payment is 10% of the total cost and you have an excellent credit rating. What is your principal balance at the start of the loan?
Excel. secured- 4.80 unsecured- 5.25
3) You are debating about whether to buy a new car for $19,242.00 or a used car for $12,425.00. Sales tax is 6.5%. You (or your parents) plan to make a down payment of $1,200.00 and your credit rating is fair. What is the difference in interest accrued by the end of the first month? *
Fair secured-7.00 unsecured-7.65
4) Say that you are purchasing a used car for $22,350. The sales tax is 7.5%, the down payment is $1,200.00, and you have an average credit rating. If your first payment is $475.25, how much of the payment goes toward the principal?
Ave. Secured 5.85 Unsecured 6.75
You don't have to just give me the answers. I would actually prefer it if you show me how to do it so that I could complete more work like this ( I have a lot of work like this!)
I'm sorry you haven't received replies for all this. I don't understand it at all and just let the bank figure it out for me!
However, I think lines like this one are too vague and no one quite knows what to do with this info?
Average Secured-5.85 Unsecured- 6.20
Are you supposed to come up with two answers per question? Perhaps if you clarify and then repost only ONE of these questions, you'll be more likely to get a response.
Of course, I'll be happy to help you with these questions step by step!
1) a) To find the interest accrued after the first month, we need to know the interest rate and the remaining balance after the down payment. However, the interest rate is not provided in the question. If you can provide the interest rate, I can help you calculate it.
1) b) To calculate the interest saved in the first month, we need to know the interest rate and the remaining balance after the down payment and credit score improvement. However, the interest rate is not provided in the question. If you can provide the interest rate, I can help you calculate it.
2) To find the principal balance at the start of the loan, we need to subtract the down payment from the total cost of the car. The down payment is 10% of the total cost, so we can calculate the principal balance as follows:
Principal balance = Total cost - Down payment
Principal balance = $17,645.00 - (10% * $17,645.00)
Principal balance = $17,645.00 - ($1,764.50)
Principal balance = $15,880.50
Therefore, the principal balance at the start of the loan is $15,880.50.
3) To find the difference in interest accrued by the end of the first month, we need to calculate the interest for both options (new car and used car) and then subtract the interest for the used car from the interest for the new car. However, the interest rates are not provided for each case. If you can provide the interest rates, I can help you calculate the difference in interest accrued.
4) To calculate how much of the first payment goes toward the principal, we need to subtract the interest portion from the total first payment. However, the interest rate is not provided in the question. If you can provide the interest rate, I can help you calculate it.
Please provide the missing information, like the interest rates, so that I can assist you further with the calculations.
Of course, I'd be happy to help you understand how to solve these problems!
1) a) To find the interest accrued after the first month, we need to calculate the loan amount and the interest rate. The loan amount is the purchase price of the car minus the down payment plus the sales tax.
Loan amount = (Purchase price of the car - Down payment) + Sales tax
Loan amount = ($16,725.00 - $1,400.00) + ($16,725.00 * 0.0615)
Next, multiply the loan amount by the applicable interest rate. Since the credit rating is average and the car is new, we'll use the average secured interest rate of 5.85%.
Interest accrued after the first month = Loan amount * Interest rate
Interest accrued after the first month = Loan amount * 0.0585
1) b) To find how much interest you could save in the first month, we'll calculate the difference in interest paid between the average credit rating and the good credit rating. We'll also need the loan amount for this calculation.
Loan amount = (Purchase price of the car - Down payment - Amount paid) + Sales tax
Loan amount = ($16,725.00 - $1,400.00 - $2,100.00) + ($16,725.00 * 0.0615)
Calculate the interest accrued in the first month with an average credit rating using the average secured interest rate of 5.85%.
Interest accrued with average credit rating = Loan amount * Interest rate (average secured)
Next, calculate the interest accrued in the first month with a good credit rating using the excel secured interest rate of 4.80%.
Interest accrued with good credit rating = Loan amount * Interest rate (excel secured)
The difference in interest accrued can be found by subtracting the interest accrued with the good credit rating from the interest accrued with the average credit rating.
Difference in interest accrued = Interest accrued with average credit rating - Interest accrued with good credit rating
2) To find the principal balance at the start of the loan, we'll calculate the loan amount. The loan amount is the purchase price of the car minus the down payment plus the sales tax. Since you have an excellent credit rating, we'll use the excel secured interest rate of 4.80%.
Loan amount = (Purchase price of the car - Down payment) + Sales tax
Loan amount = ($17,645.00 - $17,645.00 * 0.10) + ($17,645.00 * 0.0475)
3) To find the difference in interest accrued by the end of the first month, we'll calculate the loan amount for each case and then multiply it by the interest rate. The loan amounts will be different for the new car and the used car.
Loan amount for the new car = (Purchase price of the car - Down payment) + Sales tax
Loan amount for the new car = ($19,242.00 - $1,200.00) + ($19,242.00 * 0.065)
Loan amount for the used car = (Purchase price of the car - Down payment) + Sales tax
Loan amount for the used car = ($12,425.00 - $1,200.00) + ($12,425.00 * 0.065)
Next, calculate the interest accrued for each loan amount. Since the credit rating is fair, we'll use the fair secured interest rate of 7.00%.
Interest accrued for the new car = Loan amount for the new car * Interest rate (fair secured)
Interest accrued for the used car = Loan amount for the used car * Interest rate (fair secured)
The difference in interest accrued is obtained by subtracting the interest accrued for the used car from the interest accrued for the new car.
Difference in interest accrued = Interest accrued for the new car - Interest accrued for the used car
4) To find how much of the payment goes toward the principal, we'll subtract the interest accrued in the first month from the total payment.
Principal payment = Total payment - Interest accrued in the first month
First, calculate the loan amount using the same formula as in the previous questions.
Loan amount = (Purchase price of the car - Down payment) + Sales tax
Loan amount = $22,350.00 - $1,200.00 + ($22,350.00 * 0.075)
Next, calculate the interest accrued in the first month using the average secured interest rate of 5.85%.
Interest accrued in the first month = Loan amount * Interest rate (average secured)
Finally, subtract the interest accrued from the first payment to find the principal payment.
Principal payment = $475.25 - Interest accrued in the first month
I hope this helps you understand how to solve these problems! If you have any further questions, feel free to ask.