Per. 7: Financing a Car

Front

What are the key factors to consider when buying a car?

Back

1. How to select the right car 2. The costs associated with having a car 3. How to obtain suitable insurance

Front

What is the formula to calculate the total price of a car after financing?

Back

Total Price = Down Payment + (Monthly Payment x Number of Months)

Front

If you put down 20% on a $7000 car, how much is the down payment?

Back

Down Payment = 20% of $7000 = $1400

Front

What is the total amount paid for a car with a $300 down payment and monthly payments of $425 for 72 months?

Back

Total Amount Paid = Down Payment + (Monthly Payment x Number of Months) = $300 + ($425 x 72) = $30,900

Front

How do you calculate the total interest paid on a car loan?

Back

Total Interest Paid = Total Amount Paid - Cash Price

Front

What is the cash price of a car if the total amount paid is $10,416.56 and the total interest paid is $417.56?

Back

Cash Price = Total Amount Paid - Total Interest Paid = $10,416.56 - $417.56 = $10,000

Front

If Omar buys an $11,000 car and puts down 20%, how much does he finance?

Back

Financed Amount = Cash Price - Down Payment = $11,000 - ($11,000 x 20%) = $8,800

Front

What is the monthly payment for a financed car if the loan amount is $8,800 at 4.8% interest for 3 years?

Back

Monthly Payment = $262.95 (calculated using loan amortization formula)