# Help with this car payment math problem please!!!?find a used car to buy, and figure out the costs of buying this car by filling in the blanks below. You don't have enough money for a down payment,...

Help with this car payment math problem please!!!?

find a used car to buy, and figure out the costs of buying this car by filling in the blanks below. You don't have enough money for a down payment, and your credit history is so new that you have to get a five-year loan with an interest rate of 10% to make the purchase.

Make/Model:

Sales tax:

Total cost:

Monthly payment:

Total interest paid:

Total payments:

sirlsalum8 | Student

So, we decide to purchase a 2010 Pontiac Vibe 4D Wagon, because it is equipped with a dependable Toyota manufactured engine. The car can be found on Carmax.com being sold at a store in Tucson, AZ.

The asking price for the car is \$14,988 excluding sales tax.

Sales tax in AZ is 6% and in Tucson 2.1%. Therefore, the total sales tax applied will be 8.1% of \$14,988 or 0.081 x \$14,988, which is \$1,214.03.

We then add the asking price to the sales tax to get the total cost of the car, which is \$16,202.03.

We know that we’re going to be making monthly payments at an annual interest rate (APR) of 10% over five years. There are 12 months in a year, so we know that we will be making a total of 60 payments.

Here is the formula for calculating the monthly payments:

#### P ( r / 12 ) ------------------------- -m (1 - ( 1 + r / 12 ) )

Where,

• P = principal amount (initial investment)
• r = interest rate (as a decimal)
• m = number of monthly payments

In our example, a five year (60 month) loan of \$16,202.03 at 10% interest would look like this:

#### 16,202.03 ( 0.1 / 12 ) ------------------------- -60 (1 - ( 1 + .1 / 12 ) )

The monthly payment for this car will be: \$344.25.

Finally, to see the total interest paid, you'll need to multiply the monthly payment (\$344.25) by the total payments (60) and then subtract the total cost (\$16,202.03).

\$344.25 x 60 = \$20,655 - \$16,202.03 = \$4,452.97.

So, you paid \$4,452.97 in interest.

I hope this helped and shows you that you should always make a down payment, if you can.

Form

Make/Model: 2010 Pontiac Vibe 4D Wagon

Sales tax: \$1,214.03

Total cost: \$16,202.03

Monthly payment: \$344.25

Total interest paid: \$4,452.97

Total payments: 60