CALCULATING THE COST OF TOTAL CREDIT

Personal Finance

1. Sam purchases a car with a selling price of $16,950.00. He puts down $4000 and pays the

$416.45 each month for 36 months. What is the total cost

of the car?416.45 *36 = 14992.20 18992.20

+ 4000.00 - 16950.00

18992.20 2042.20

(cost of credit)

Jackie decides to lease a car for two years. She puts 0 money down and pays $209.15 per month for 24 months. At the end of the lease, Jackie can buy the car for $11,345.00. The selling price for the car today is $13,500.00. What is the total cost of the car if Jackie buys it at the end of the lease?

209.15 * 24 = 5019.60 +11345.00

16364.60

A living room suit is advertised for $890.00. No payments are required for 12 months. At the end of twelve months, Jessica finds she has to pay $1075.00. What is the total cost of credit?

1075.00

- 890.00

185.00 (Interest or Cost of Credit)

4. a) The bank offers Bill a car loan for 48 months at a rate of 13%. Bill

buys a car for $23,890.00. He puts $3000.00 down and takes a bank loan for the balance. What is the

total cost of the car?

23890.00 20890.00 20890.00- 3000.00 * .13 + 10862.8020890.00 2715.70 31752.80

*4 + 3000.00 10862.80 34752.80

cost of credit

B) If Bill puts down $7,500 how does that affect the total cost of

the car?

23890.00 16390.00 16390.00- 7500.00 * .13 + 8522.8016390.00 2130.70 24912.80

*4 + 7500.00 8522.80 32412.80

cost of credit

5. Katie buys a snowmobile for $2,200.00. She pays with her credit card. When she gets the bill, she pays in full before the due date. What is the total cost of the snowmobile?

$2200 – Interest is charged on the balance carried forward