Valerie is going to purchase a new car. The car she wants has a list price of $32,495. Valerie is planning to make a down payment of $1,877. Furthermore, she plans to trade in her current car, which is a 2006 Hyundai Sonata in good

condition. She will finance the rest of the cost by making monthly payments over five years. She can finance the cost

at a rate of 8.64%, compounded monthly. She will also have to pay 8.23% sales tax, a $2,243 vehicle registration fee,

and a $314 documentation fee. If the dealer gives Valerie 87.5% of the trade-in price on her car, listed below,

approximately how much will Valerie pay in total for her new car? (Round all dollar values to the nearest cent, and

consider the trade-in to be a reduction in the amount paid.)

OPEN TOP TO SEE ANSWER

The total amount that Valerie will pay for her new car is $35,899.87.

We can use an online finance calculator to compute the total amount that Valerie will pay for her new car as follows:

Auto Price = $32,495

Loan Term = 60 months (12 x 5)

Interest Rate = 8.64%

Down Payment = $1,877

Trade-in Value = $28,433 ($32,495 x 87.5%)

Sales Tax = 8.23%

Title, Registration and Other Fees = $2,557 ($2,243 + $314)

Calculate

Monthly Pay: = $44.98

Total Loan Amount = $2,185.00

Sale Tax = $334.30

Upfront Payment = $4,768.30

Total of 60 Loan Payments= $2,698.57

Total Loan Interest = $513.57

Total Cost (price, interest, tax, fees) = $35,899.87

Thus, the total amount that Valerie will pay for her new car is $35,899.87.

Learn more about financing a car purchase at link

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