Mr. Two can afford car payments of $235 a month for 48 months. The bank will lend him money to buy a car at 7.75 per cent interest. How much money can he afford to borrow?

http://www.investopedia.com/calculator/pvcal.aspx

time period 48
interest rate: 7.75/12
future value: 235

present value = 235( 1 - (1+.0775/12)^-48)/(.0775/12)

= $9672.48

Thank you guys.

To determine how much money Mr. Two can afford to borrow, we need to calculate the loan amount based on the given car payments and interest rate.

Step 1: Convert the interest rate from a percentage to a decimal:
7.75% = 7.75/100 = 0.0775

Step 2: Calculate the monthly interest rate:
Monthly Interest Rate = Annual Interest Rate / 12
Monthly Interest Rate = 0.0775 / 12 = 0.00646 (approx.)

Step 3: Calculate the loan amount using the formula for monthly loan payments:
Loan Amount = Monthly Payment / (Monthly Interest Rate * (1 + Monthly Interest Rate)^(Number of Payments) - 1)

Plugging in the given values:
Monthly Payment = $235
Number of Payments = 48

Loan Amount = $235 / (0.00646 * (1 + 0.00646)^48 - 1)

Now we can simplify and calculate the value.