I plan to buy a car which costs R6500 plus interest of R16000. She has budgeted for a monthly payment of R1800. If she has to pay the car of in 40 equal payments, can I afford the car?
To determine if you can afford the car, we need to calculate the total cost of the car plus interest and divide it by the number of payments.
Total cost of the car = R6500 + R16000 = R22500
Monthly payment = R1800
Number of payments = 40
Total cost of the car divided by number of payments = R22500 / 40 = R562.5
Since the monthly payment you have budgeted for is R1800, which is higher than R562.5, you can afford the car.