The total cost of the vehicle is $29760
What is Interest Rate ?
The % at which a loan is given or the % at which your investment will give return is the Interest Rate.
It is given that
Walter purchased a 2010 model sedan for $24,000.
The dealership offered him a $199/month payment plan for 48 months,
Principal = $24000
Rate = 6%
Time =48 months = 4 years
The Simple interest =
24000 * 6 * 4 / 100
Interest = $5760
The payment done in 48 moths is
199 * 48 = $9552
The balloon payment due at the end of 48 months is 24000 + 5760 - 9552 = $20208
The total cost of the vehicle is $ 24000+ 5760 = $29760.
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