Solution:
Present Value of car= $ 23,495
Down Payment = $ 500
Total Amount paid monthly for 3 years that is 36 months, if you pay $ 429.95 per month=$ 15478.20
Total amount paid for the car as an agreement which includes Down payment of $ 500 as well as monthly Payment of $ 429.95 for 36 months= $ 15478.20+$ 500=$ 15978.20
As, given Interest is 30% of the payment.
So, total interest = 30% of $ 15978
[tex]=\frac{30}{100}\times 15978.20[/tex]
= $ 4793.40
But if you will calculate interest on payment of $ 429.95 at the rate of 30%, it gives
[tex]=\frac{30}{100}\times 429.95[/tex]
= $128.985
So, total interest for 3 years= $128.985 ×36=$ 4643.46
Also, if you will calculate interest on payment of ($500+$429.95=$929.95) at the rate of 30%
[tex]=\frac{30}{100}\times 929.95[/tex]
=$278.985
Total interest for 3 years= $278.985 ×36=$10,043.46
