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3. You (or your parents) are purchasing a car for $18.965.00 plus 6.25% sales tax. The down
payment is $1,500.00. What is the difference in the accrued interest at the end of the first
month between the average and excellent credit ratings?

3 You or your parents are purchasing a car for 1896500 plus 625 sales tax The down payment is 150000 What is the difference in the accrued interest at the end o class=

Respuesta :

Using simple interest, it is found that the difference in the accrued interest at the end of the first  month between the average and excellent credit ratings is of $14.77.

Simple Interest

  • The amount of interest after t years in simple interest is modeled by:

[tex]I = Prt[/tex]  

In which:  

  • P is the initial amount.
  • r is the interest rate, as a decimal.
  • t is the time, in years.

In this problem, the car is bought for $18.965.00 plus 6.25% sales tax, hence the amount that has to be paid is:

[tex]A = 18965(1 + 0.0625) = 20150.3125[/tex]

The down  payment is $1,500.00, hence, the principal is:

[tex]P = 20150.3125 - 1500 = 18650.3125[/tex]

For average ratings, the interest rate is of 4.90%, hence [tex]r = 0.049[/tex], and, after 1 month, considering the time in years:

[tex]I_A = 18650.3125(0.049)\frac{1}{12} = 76.16[/tex]

For excellent ratings, the interest rate is of 3.95%, hence [tex]r = 0.0395[/tex], and, after 1 month, considering the time in years:

[tex]I_E = 18650.3125(0.0395)\frac{1}{12} = 61.39[/tex]

The difference is:

[tex]d = I_A - I_E = 76.16 - 61.39 = 14.77[/tex]

You can learn more about simple interest at https://brainly.com/question/26122901

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