Question

"Jamie wants to buy a new Ford Escape priced at $20,256. If she finances the car with no down payment, her monthly payment will be $455.76 for 48 months. If she pays cash, how much interest expense will she save?"

Answer 1

Answer:

$ 1,620.46

Explanation:

The amount of interest to be saved is the difference between the cash price and the total amount to be paid if the installments option is preferred.

The cash price is $20, 256

The total from installment option will be monthly payments x time taken

=$455.76 x 48

=$21,876.48

Interests to be saved = $21,876.48 - $20, 256

=$ 1,620.46