Using The Following Information, What Is The Cost To Buy A Car?

(Correct Answer Below)

Using The Following Information, What Is The Cost To Buy A Car?

-down payment: $3000 -Monthly loan payment: $350 per month for a six year loan -Opportunity cost of down payment: $3000 x loan period (in years) x 2% -Estimated value of vehicle at end of ownership period $4000
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$24,560. Total vehicle cost = Down payment + Total monthly loan payment + Opportunity cost - Estimated value at end of ownership = ($3,000) + ($350 _ 6 years _ 12 months) + ($3,000 _ 6 years _ 2%) - ($4,000) = $3,000 + $25,200 + $360 - $4,000 = $24,560.

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