Go to http://www.kbb.com/new-cars and choose a new car you would like to purchase. Go through all the steps of adding additional options to your car. Note the MSRP.
Then go to https://www.chase.com/ and click Products and Services and in the dropdown list click on auto loans and check auto loan rates. Input your zip code and compare with the standard auto loan rates. Summarize your findings.
Assume you are taking the loan out for 60 months. What would the simple interest and the maturity value be on your new car purchase?
Make up your own purchasing example and apply the I = Prt formula to this example.
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If a loan is taken for 60 months at this rate, the simple interest accrued is 282820*0.0301*5 = $42564.41. The resulting maturity value, which is a sum of the interest on the principle amount and the principle amount, for the car loan would be $325384.41.
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