Suppose you want to buy a new car that costs $32,100. You have no cash - only your old car, which is worth $3000 as a trade-in. The dealer says the interest rate is 4% add-on for 5 years. Find the total amount to be repaid. The total amount to be repaid is $ (Simplify your answer.)

Suppose you want to buy a new car that costs $32,100. You have no cash - only your old car, which is worth $3000 as a trade-in. The dealer says the interest rate is 4% add-on for 5 years. Find the total amount to be repaid. The total amount to be repaid is $ (Simplify your answer.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 5CE

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Suppose you want to buy a new car that costs $32,100. You have no cash- only your old car, which is worth $3000 as a trade-in. The dealer says the interest rate is 4% add-on for 5 years. Find the total amount to be repaid.
The total amount to be repaid is $
(Simplify your answer.)
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