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Suppose that you are thinking about buying a car and have narrowed down your choices to two options. The new-car option: The new car costs $28,000 and can be financed with a three-year loan at 6.38%. The used-car option: A three-year old model of the same car costs $18,000 and can be financed with a three-year loan at 6.79%. What is the difference in monthly payments between financing the new car and financing the used car? Use PA PMT= -nt

Suppose that you are thinking about buying a car and have narrowed down your choices to two options. The new-car option: The new car costs $28,000 and can be financed with a three-year loan at 6.38%. The used-car option: A three-year old model of the same car costs $18,000 and can be financed with a three-year loan at 6.79%. What is the difference in monthly payments between financing the new car and financing the used car? Use PA PMT= -nt

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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K 100 Suppose that you are thinking about buying a car and have narrowed down your choices to two options. The new-car option: The new car costs $28,000 and can be financed with a three-year loan at 6.38%. The used-car option: A three-year old model of the same car costs $18,000 and can be financed with a three-year loan at 6.79%. What is the difference in monthly payments between financing the new car and financing the used car? Use PMT= P - n -nt ….….. The difference in monthly payments between financing the new car and financing the used car is $305.37 (Round to the nearest cent as needed.) 85°F C
Transcribed Image Text:K 100 Suppose that you are thinking about buying a car and have narrowed down your choices to two options. The new-car option: The new car costs $28,000 and can be financed with a three-year loan at 6.38%. The used-car option: A three-year old model of the same car costs $18,000 and can be financed with a three-year loan at 6.79%. What is the difference in monthly payments between financing the new car and financing the used car? Use PMT= P - n -nt ….….. The difference in monthly payments between financing the new car and financing the used car is $305.37 (Round to the nearest cent as needed.) 85°F C
Expert Solution
Step 1

Given that,

The new car option, The car cost is $28,000 and interest rate 6.38%. The number of years is 3.

The used car option is $18,000 and interest rate 6.79%. The number of years is 3.

Find the difference in monthly payments between financing the new car and financing the used car.

 

Using the formula of monthly payment is PMT=Prn1-1+rn-nt.

Where, P is the principal amount, r is the interest rate, and t is the time per years.

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