You (or your parents) are debating about whether to buy a new car for $19,072.00 or a used car for $15,635.00. Sales tax is 4.5%. You (or your parents) plan to make a down payment of $1,200.00 and your credit rating is fair. Use the table below to determine the difference in interest accrued by the end of the first month.
To determine the difference in interest accrued by the end of the first month, we need to calculate the total cost for both the new and used car options and then subtract the down payment.
1. New Car Option:
Start with the price of the new car: $19,072.00
Add the sales tax of 4.5%:
$19,072.00 * 0.045 = $858.24
Total cost of the new car: $19,072.00 + $858.24 = $19,930.24
Subtract the down payment: $19,930.24 - $1,200.00 = $18,730.24
2. Used Car Option:
Start with the price of the used car: $15,635.00
Add the sales tax of 4.5%:
$15,635.00 * 0.045 = $703.57
Total cost of the used car: $15,635.00 + $703.57 = $16,338.57
Subtract the down payment: $16,338.57 - $1,200.00 = $15,138.57
Now, we have the total costs of both options after subtracting the down payments.
To calculate the interest accrued by the end of the first month, we need additional information such as the interest rate, loan term, and compounding frequency. If you provide these details, I can help you calculate the difference in interest accrued for both options.