Question

emily wants the lowest monthly car payment possible, even if it costs more overall. which loan term would she choose?
36 months
48 months
60 months
72 months
a buyer trades in a car worth $5,000 and makes a $2,000 down payment on a $20,000 vehicle. how much must she finance (borrow)?
$13,000
$15,000
$18,000
$20,000

Explanation:

First Question (Emily's Loan Term)

To get the lowest monthly payment (even with higher total cost), a longer loan term is needed. Longer terms spread the loan amount over more months, reducing monthly payments. Among the options, 72 months is the longest term.

Step1: Calculate total reduction from trade - in and down payment

The trade - in value is $5,000 and the down payment is $2,000. So the total reduction is $5,000 + $2,000=$7,000.

Step2: Calculate the financing amount

The vehicle cost is $20,000. To find the amount to finance, we subtract the total reduction from the vehicle cost. So, $20,000 - $7,000 = $13,000.

Answer:

D. 72 months

Second Question (Financing Amount)