Financing a Car (Quiz)

Suzanne has purchased a car with a list price of $23,860. She traded in her previous car, which was a Dodge in good condition, and financed the rest of the cost for five years at a rate of 11.62%, compounded monthly. The dealer gave her 85% of the listed trade-in price for her car. She was also responsible for 8.11% sales tax, a $1,695 vehicle registration fee, and a $228 documentation fee. If Suzanne makes a monthly payment of $455.96, which of the following was her original car? a. 2004 Intrepid b. 2008 Neon c. 2005 Viper d. 2007 Dakota

a. 2004 Intrepid

A trade-in is most closely related to which of the following? a. A down payment, because it reduces the amount financed. b. An interest payment, because it represents value given to the dealer. c. The list price, because it is derived from the price of a car. d. Amortization, because it is a way of paying for car financing

a. A down payment, because it reduces the amount financed.

Bernie has decided to purchase a new car with a list price of $18,575. Sales tax in Bernie's state is 7.40%, and he will be responsible for a $795 vehicle registration fee and a $110 documentation fee. Bernie plans to trade in his existing car, a 1999 Buick Riviera in good condition, and finance the rest of the cost for five years at an interest rate of 12.77%, compounded monthly. Assuming that the dealer gives Bernie the listed trade-in price for his car, what will his monthly payment be? Round all dollar values to the nearest cent. a. $472.05 b. $439.12 c. $438.20 d. $518.23

b. $439.12

Laura is currently paying off her four-year car financing. When she purchased her car, it had a list price of $19,858. Laura traded in her previous car, a good-condition 2000 Honda Insight, for 85% of the trade-in value listed below, financing the rest of the cost at 9.5% interest, compounded monthly. She also had to pay 9.27% sales tax, a $988 vehicle registration fee, and a $77 documentation fee. However, because Laura wants to pay off her loan more quickly, she makes a total payment of $550 every month. How much extra is she paying monthly? Round all dollar values to the nearest cent. a. $73.81 b. $71.72 c. $88.24 d. $77.92

b. $71.72

The following table shows a portion of a three-year amortization schedule. Use the information in the table to decide which of the following statements is true. a. The payment amount changes each month. b. The amount applied to the principal is decreasing each month. c. The amount applied to the principal is increasing each month. d. The amount applied to interest is increasing each month.

c. The amount applied to the principal is increasing each month.

Reg has just purchased a new car. The car had a list price of $22,499, and he was responsible for 7.96% sales tax, a $2,138 vehicle registration fee, and a $262 documentation fee. Reg's financing has an interest rate of 10.27%, compounded monthly, and a duration of three years. If Reg makes a monthly payment of $773.89, which of the following was his down payment? Round all dollar values to the nearest cent. a. $2,000 b. $2,200 c. $2,500 d. $2,800

d. $2,800

Terry has just purchased a new car, which had a list price of $16,825. She had to pay 7.19% sales tax, a $1,128 vehicle registration fee, and a $190 documentation fee. Terry traded in her previous vehicle, a 2003 Honda Element in good condition, and financed the rest of the cost over five years at an interest rate of 10.59%, compounded monthly. If the dealer gave Terry 90% of the listed trade-in value on her car, how much will Terry have paid in interest, once the loan is paid off? (Round all dollar values to the nearest cent, and consider the trade-in to be a reduction in the amount paid.) a. $5,657.08 b. $3,721.28 c. $3,817.63 d. $3,914.68

d. $3,914.68

Christopher has just made the final monthly payment necessary to pay off his car financing. The car had a list price of $25,995. He made a down payment of $2,434. Additionally, there was a $1,626 vehicle registration fee and a $275 documentation fee. He also paid sales tax of 8.44% on the cost of the vehicle. He included the taxes and fees with the purchase price of the car in a four-year finance agreement with an interest rate of 11.10%, compounded monthly. After completing payment of the four-year loan, what was the total amount of money that Christopher paid for his car? Round to the nearest dollar. a. $23,310 b. $27,656 c. $34,374 d. $36,808

d. $36,808

When purchasing her new car, Molly traded in her previous car, which was a Buick in good condition. The dealer offered her 80% of the listed trade-in value for her car, giving her a total of $1,340.80. What was Molly's previous car? a. 1999 LeSabre b. 2002 Century c. 2001 Riviera d. 1998 Regal

d. 1998 Regal

The following table shows the first two years of a three-year amortization schedule. Use the information in the table to decide which of the following statements is true. a. The interest amount increases each month. b. The principal amount decreases each month. c. The payment amount changes each month. d. The payment amount each month stays the same.

d. The payment amount each month stays the same