Question

If John makes a down payment when purchasing a new vehicle, interest will be calculated on the price of the _____.

Select the best answer from the choices provided.
down payment
vehicle minus the down payment
vehicle
vehicle plus the down payment

Answer 1

The interest is calculated on the vehicle price minus the down payment.

You will only pay for what you are borrowing. A down payment is money you have to pay for Part of a car. This means you would be charged interest on the remaining balance.