Question

Aiden can afford a $280-per-month car payment. If he is being offered a 4-year car loan with an APR of 1.8%, compounded monthly, what is the value of the most expensive car he can afford?

A.13,439.51
B.13,390.73
C.12,958.20
D.13,435.06

Answer 1

C. 12,958.20

Explanation:

the a p e x

Answer 2

Use the formula of the present value of annuity ordinary.
The formula is
Pv=pmt [(1-(1+r/k)^(-kn))÷(r/k)]
Pv present value?
PMT payment per month 280
R interest rate 0.018
k compounded monthly 12
T time 4years
Pv=280×((1−(1+0.018÷12)^(−12
×4))÷(0.018÷12))
=12,958.20

It's c