Rose bought a $13,500 car, paid 20% down, and paid the rest in equal monthly installments for 3 years, no interest. What was each monthly installment?
Each monthly installment is $300.
To determine the monthly installment for the car purchased by Rose, we first calculate the down payment and the remaining balance. Rose paid 20% down on a $13,500 car, which amounts to $2,700. The total amount financed is then $10,800, which is divided over 36 months, resulting in a monthly payment of $300.
This choice is correct because after calculating the down payment of 20% ($2,700), the remaining balance of $10,800 is divided by the 36 months (3 years) to yield a monthly installment of $300.
Choosing $325 would suggest a higher monthly payment than calculated. If we were to assume $325 as the monthly payment, the total paid over 36 months would amount to $11,700, which exceeds the remaining balance after the down payment and is therefore incorrect.
A monthly payment of $350 results in a total of $12,600 paid over 36 months. This amount is also greater than the financed balance of $10,800, thus making this option incorrect.
Opting for $375 as the monthly installment would lead to a total payment of $13,500 over 36 months, which significantly surpasses the remaining balance. Hence, this choice is not feasible in the context of the loan.
The calculation of Rose's monthly car payment reveals that she will pay $300 each month over 3 years after her initial down payment. This figure is derived from accurately dividing the remaining balance by the number of months, highlighting the importance of understanding installment calculations in personal finance. All other options exceed the permissible amount based on the down payment and remaining balance.
Related Questions
View allRelated Quizzes
View allPraxis 5001 Test with Answers
Praxis 5002 Study Guide
5002 Praxis Practice Test
Reading & Language Arts Praxis 5002
Praxis 5002 Reading and Language Arts Exam
Praxis 5003 Exam with Outline
5003 Praxis Math Answers
Praxis 5003 Study Guide
Praxis Social Studies 5004
Praxis 5004 Social Studies
- ✓ 500+ Practice Questions
- ✓ Detailed Explanations
- ✓ Progress Analytics
- ✓ Exam Simulations