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David is buying a new car for $21,349.00. He plans to make a down payment of $3,000.00. If he's to make monthly payments of $352 for the next five years, what APR has he paid? A. 59% B. 5.9% C. .05% D. 5%

Respuesta :

Answer:

APR has he paid 5.9%

option B is correct

Explanation:

given data

Cost of car = $21,349

down payment = $3000

Monthly payments (A) = $352

time period t = 5 year = 5 × 12 = 60 months

to find out

what APR has he paid

solution

we know that we have remaining balance amount = 21349 - 3000

=  $18,349

so we say that loan amount L = $18,349

here rate r = rate of interest = r/12 monthly

so we use formula amount

payment (A) = [tex]\frac{L\frac{r}{12} }{1-(1+\frac{r}{12})^{-t} }[/tex]

put all thes evalue we get

352 = [tex]\frac{18349\frac{r}{12} }{1-(1+\frac{r}{12})^{-60} }[/tex]

r = 0.059 = 5.9 %

so option B is correct

APR has he paid 5.9%

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