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You want to buy a new SUV from your local Ford dealer. The total price of...

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Question

Finance

You want to buy a new SUV from your local Ford dealer. The totalprice of the SUV is $40,000 including tax ,tag ,title, and allfees. You can afford to pay 15% as a down payment and will need tofinance the remainder. Ford credit offers you a special studentrate 2.75% (compounded monthly) for 72 months. You will makemonthly payments starting 1-month from today). What is the monthlypayment?

Answer choices:

A.$603.28

B. $543.79

C.$500.92

D. $512.79

Answer & Explanation Solved by verified expert
4.1 Ratings (809 Votes)

Loan = price-downpayment = 40000-0.15*40000=34000

Monthly rate(M)= yearly rate/12= 0.23% Monthly payment= 512.79
Month Beginning balance (A) Monthly payment Interest = M*A Principal paid Ending balance
1 34000.00 512.79 77.92 434.87 33565.13
2 33565.13 512.79 76.92 435.87 33129.25
3 33129.25 512.79 75.92 436.87 32692.38
4 32692.38 512.79 74.92 437.87 32254.51
5 32254.51 512.79 73.92 438.87 31815.64
6 31815.64 512.79 72.91 439.88 31375.76
7 31375.76 512.79 71.90 440.89 30934.87
8 30934.87 512.79 70.89 441.90 30492.97
9 30492.97 512.79 69.88 442.91 30050.06
10 30050.06 512.79 68.86 443.93 29606.13
11 29606.13 512.79 67.85 444.94 29161.19
12 29161.19 512.79 66.83 445.96 28715.23
13 28715.23 512.79 65.81 446.99 28268.24
14 28268.24 512.79 64.78 448.01 27820.23
15 27820.23 512.79 63.75 449.04 27371.20
16 27371.20 512.79 62.73 450.07 26921.13
17 26921.13 512.79 61.69 451.10 26470.03
18 26470.03 512.79 60.66 452.13 26017.90
19 26017.90 512.79 59.62 453.17 25564.74
20 25564.74 512.79 58.59 454.21 25110.53
21 25110.53 512.79 57.54 455.25 24655.28
22 24655.28 512.79 56.50 456.29 24199.00
23 24199.00 512.79 55.46 457.34 23741.66
24 23741.66 512.79 54.41 458.38 23283.28
25 23283.28 512.79 53.36 459.43 22823.84
26 22823.84 512.79 52.30 460.49 22363.36
27 22363.36 512.79 51.25 461.54 21901.82
28 21901.82 512.79 50.19 462.60 21439.22
29 21439.22 512.79 49.13 463.66 20975.56
30 20975.56 512.79 48.07 464.72 20510.83
31 20510.83 512.79 47.00 465.79 20045.05
32 20045.05 512.79 45.94 466.85 19578.19
33 19578.19 512.79 44.87 467.92 19110.27
34 19110.27 512.79 43.79 469.00 18641.27
35 18641.27 512.79 42.72 470.07 18171.20
36 18171.20 512.79 41.64 471.15 17700.05
37 17700.05 512.79 40.56 472.23 17227.82
38 17227.82 512.79 39.48 473.31 16754.51
39 16754.51 512.79 38.40 474.40 16280.12
40 16280.12 512.79 37.31 475.48 15804.63
41 15804.63 512.79 36.22 476.57 15328.06
42 15328.06 512.79 35.13 477.66 14850.40
43 14850.40 512.79 34.03 478.76 14371.64
44 14371.64 512.79 32.94 479.86 13891.78
45 13891.78 512.79 31.84 480.96 13410.83
46 13410.83 512.79 30.73 482.06 12928.77
47 12928.77 512.79 29.63 483.16 12445.61
48 12445.61 512.79 28.52 484.27 11961.34
49 11961.34 512.79 27.41 485.38 11475.96
50 11475.96 512.79 26.30 486.49 10989.47
51 10989.47 512.79 25.18 487.61 10501.86
52 10501.86 512.79 24.07 488.72 10013.13
53 10013.13 512.79 22.95 489.84 9523.29
54 9523.29 512.79 21.82 490.97 9032.32
55 9032.32 512.79 20.70 492.09 8540.23
56 8540.23 512.79 19.57 493.22 8047.01
57 8047.01 512.79 18.44 494.35 7552.66
58 7552.66 512.79 17.31 495.48 7057.18
59 7057.18 512.79 16.17 496.62 6560.56
60 6560.56 512.79 15.03 497.76 6062.80
61 6062.80 512.79 13.89 498.90 5563.91
62 5563.91 512.79 12.75 500.04 5063.87
63 5063.87 512.79 11.60 501.19 4562.68
64 4562.68 512.79 10.46 502.33 4060.34
65 4060.34 512.79 9.30 503.49 3556.86
66 3556.86 512.79 8.15 504.64 3052.22
67 3052.22 512.79 6.99 505.80 2546.42
68 2546.42 512.79 5.84 506.96 2039.47
69 2039.47 512.79 4.67 508.12 1531.35
70 1531.35 512.79 3.51 509.28 1022.07
71 1022.07 512.79 2.34 510.45 511.62
72 511.62 512.79 1.17 511.62 0.00
Where
Interest paid = Beginning balance * Monthly interest rate
Principal = Monthly payment – interest paid
Ending balance = beginning balance – principal paid
Beginning balance = previous Month ending balance

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Transcribed Image Text

You want to buy a new SUV from your local Ford dealer. The totalprice of the SUV is $40,000 including tax ,tag ,title, and allfees. You can afford to pay 15% as a down payment and will need tofinance the remainder. Ford credit offers you a special studentrate 2.75% (compounded monthly) for 72 months. You will makemonthly payments starting 1-month from today). What is the monthlypayment?Answer choices:A.$603.28B. $543.79C.$500.92D. $512.79

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