Question

Jessica has $70,000 in the bank and is earning 5% compounded monthly. She plans to purchase a used car, for which the down payment is $500 and the monthly payments are $280?

Will her monthly interest cover the cost of the down payment? Explain?​

Answer 1

Answer:

Yes

Step-by-step explanation:

5% of 70,000 is 3,500 (70,000 x 0.05 = 3,500)

That means she is earning at least $3,500 a month from interest.

$3,500 is plenty to cover the monthly payment of $280.

You know what, I think Jessica should get a brand new car instead.