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Suppose you want to buy a new car that costs $32,700. You have no cash-only your old car, which is worth $5000
as a trade-in. The dealer says the interest rate is 3% add-on for 5 years. Find the monthly payment.
The monthly payment is $
(Type an integer or decimal rounded to the nearest cent as needed.)



Answer :

To find the monthly payment for the new car, we'll first calculate the total amount to be financed, including the cost of the new car minus the trade-in value of the old car. Then, we'll calculate the total amount to be paid over the 5-year period with the given interest rate. Finally, we'll divide this total by the number of months (60 months) to find the monthly payment.

1. Total amount to be financed:

  Cost of the new car - Trade-in value of the old car

  $32,700 - $5,000 = $27,700

2. Total amount to be paid over 5 years with 3% add-on interest:

  Total amount to be financed * (1 + (interest rate * number of years))

  $27,700 * (1 + (0.03 * 5))

  $27,700 * (1 + 0.15)

  $27,700 * 1.15 = $31,855

3. Monthly payment:

  Total amount to be paid / number of months

  $31,855 / 60 ≈ $530.92

So, the monthly payment for the new car would be approximately $530.92.

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