Question

Silvia is planning to use a 4-year loan to purchase a car.
• The price of the car is $8,575.
• The amount of interest she will have to pay on the loan is $1,036
Silvia will combine the price of the car and the amount of interest to determine how much she must repay. She will make 48 equal monthly
payments.
Which of the following is the best estimate of each monthly payment Silvia will make?
A. $175
B. $200
C. $225
D. $250

Answer 1

Answer:

B

Step-by-step explanation:

8575 + 1036 = 9611

9611 is the full payment

9611 / 48 months = 200.229

About $200 every month

Answer 2

The best estimate of each monthly payment that Silvia will make is given by: Option B: $200

What to calculate net payable amount after interest is applied?

The net payable amount is the sum of main amount to be paid + the amount of interest.

For this case, it is specified that:

• The price of the car is $8,575.
• The amount of interest she will have to pay on the loan is $1,036

Thus, we get:
Total payable amount by Silvia for car purchasing = $8575 + $1036 = $9,611

This payable amount is divided in 48 equal parts. The value of each part (the monthly payment amount by Silvia) is:

$\dfrac{9611}{48} \approx 200 \: \rm dollars$

Thus, the best estimate of each monthly payment that Silvia will make is given by: Option B: $200

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