Answer to Question #95828 in Financial Math for david

Question

Say that you (or your parents) are purchasing a used car for $19,850. The sales tax is 7.5%, the down payment is $1,000.00, and you have an average credit rating. If your first payment is $425.98, how much of the payment goes toward the principal?

Answer 1

Answer:

$326.83

Solution:

19,850 x 1.075 (sales tax) =21,338.75

21,338.75 - 1000 (downpayment) = 20,338.75

20,338.75 x .0585/12 (interest rate) = 99.15 interest

425.98 payment - 99.15 interest = 326.83 payment to principal