Question

when the engine falls out of rhondas old car, its time to shop for something newer. she is hoping to keep her monthly payment at \\$170, and a loan will be 6.6\\% simple interest for 48 months.

part 1 of 2
(a) if rhonda plans to make a down payment of \\$2000 and finance her car for 48 months, whats the price of the most expensive car she can afford? (hint let \\(x =\\) the price of the car and use the formulas for fixed installment loans and the simple interest formula to set up an equation.) round the answer to the nearest cent.

the most expensive car that rhonda can afford is \\$ 8,455.70.

part 2 of 2
(b) how much does the highest price she can afford go up if she puts down \\$6000 and finances for 48 months at 6.6\\%, keeping her payment at \\$170?

if she puts down \\$6000, the highest price she can afford increases by \\$ .

Explanation:

Identify the given values and target

Using the Installment Loans and Down Payment Calculation knowledge points
We are given:

• Monthly payment \(M = \$170\)
• Loan term \(t = 48\text{ months} = 4\text{ years}\)
• Simple interest rate \(r = 6.6\% = 0.066\)
• Initial down payment \(D_1 = \$2000\)
• New down payment \(D_2 = \$6000\)
• Target: Find the increase in the highest affordable car price when the down payment increases from \(D_1\) to \(D_2\).

Set up the loan equation

Using the Simple Interest knowledge point

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Calculate the financed amount

Using the Simple Interest and Installment Loans knowledge points

$$
LATEXBLOCK1
$$

Determine the change in affordable price

Using the Down Payment Calculation knowledge point

$$
LATEXBLOCK2
$$

Answer:

If she puts down \$6000, the highest price she can afford increases by <blank>4000</blank>.