The total amount that Parker will spend on the car for each option with monthly payments are as follows:
Option A Option B
Monthly Payment $473.69 $423.46
Total Cost $34,105.45 $36,288.86
Data and Calculations:
Option A Option B
Cost of car $32,018 $32,018
APR 2.1% 5.1%
Period of loan 72 months 72 months
Down payment $0 $5,800 ($2,600 + $3,200)
Total loan amount $32,018 $26,218 ($32,018 - $5,800)
Total Loan Payments $32,018.00 $30,488.86
Total Loan Interest $2,087.45 $4,270.86
Monthly Payment $473.69 $423.46
Total Cost $34,105.45 $36,288.86
Option B:
Auto Price = $ 32,018
Loan Term 72 months
Interest Rate 5.1%
Down Payment 5800
Results:
Monthly Pay = $423.46
Total Loan Amount = $26,218.00
Upfront Payment = $5,800.00
Total of 72 Loan Payments = $30,488.86
Total Loan Interest = $4,270.86
Total Cost (price, interest, tax, fees) = $36,288.86
Option A:
Auto Price = $32,018
Loan Term 72 months
Interest Rate 2.1
Down Payment 0
Results:
Monthly Pay: $473.69
Total Loan Amount = $32,018.00
Upfront Payment = $0.00
Total of 72 Loan Payments = $34,105.45
Total Loan Interest = $2,087.45
Total Cost (price, interest, tax, fees) = $34,105.45
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