Question

Stuart buys a $24,000 car with a down payment of $2,000. He is given a 3-year loan with an APR of 10.4 percent. What is the amount financed on this loan?

A. $22,000
B. $21,031
C. $20,000
D. $18,000

Answer 1

depends on the numbers.

Explanation:

The dollar amount of the finance charge is equal to the sum of the loan payments over the life of the loan minus the amount borrowed. The sum of the loan payments is equal to $584.20 x 36 months = $21,031.20. The dollar amount of the finance charge is $21,031.20 minus the amount borrowed, which was $18,000, which equals $3,031.20.

Answer 2

A. $22,000

Explanation :

Given,

The value of the car = $ 24,000,

The amount of down payment = $ 2,000,

If he takes a loan for paying the remaining amount of the car,

Then, the amount financed on this loan = The value of the car - down payment

= $ 24,000 = $ 2,000

= $ 22,000

Hence, Option 'A' is correct.