COMPARE: Auto Loans Molly is celebrating her amazing new career and wants to upgrade her junky ld car for a g new Volkswagen Jetta. She heads to Volkswagen’s website and sees the following financing Part 1: 0% APR sounds PERFECT! Proksch Joctober 2012 Alyssa www.ngpf.org Finance for 1.9% APR NGPF Activity Bank Types of Credit Spanish Versi For 84 months Plus up to $500 Cash Allowance Select year 2022 – New Select a trim SE (Most Popular) – $24,790 MSRP Note: For this activity, assume Molly’s going to pay the exact MSRP of $24,790. This is most likely NOT true, but we’ll use it for simplicity. Answer the following questions using the details from the 0% APR offer above. Please round all answers to the nearest dollar. 1. Molly has a $2500 down payment saved for this purchase, and the dealer’s $1500 Cash Allowance will come straight off her total. How much loan does Molly need? Last updated: 4\/7\/22 inside<\/p>\n\n\n\n
The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n Molly’s loan amount is calculated as follows:<\/p>\n\n\n\n MSRP:<\/strong> $24,790 When purchasing a car with financing, the total cost is reduced by any upfront payments, including the down payment and dealer incentives. In Molly\u2019s case, she has a down payment of $2,500, meaning she will pay this amount directly to the dealer. Additionally, the dealer is offering a $1,500 cash allowance, which acts as a discount, reducing the total amount that needs to be financed.<\/p>\n\n\n\n To determine the loan amount, we subtract both the down payment and the cash allowance from the car\u2019s MSRP (Manufacturer’s Suggested Retail Price). This gives us a total loan amount of $20,790.<\/p>\n\n\n\n Since Molly is taking advantage of a 0% APR (Annual Percentage Rate)<\/strong> offer, her loan will not accumulate any interest over time. This means the total amount she pays over the life of the loan is exactly the same as the loan amount: $20,790.<\/p>\n\n\n\n This is a great financing option because 0% APR means there are no extra interest charges<\/strong> added to the loan, making it a cost-effective way to purchase a car compared to loans with higher interest rates.<\/p>\n\n\n\n If she had taken a loan with an interest rate (such as 1.9% APR), she would end up paying more over time due to accumulated interest. However, with 0% APR, she simply divides the loan amount by the number of months in her loan term to determine her monthly payments.<\/p>\n\n\n\n Thus, Molly’s loan amount is $20,790.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" COMPARE: Auto Loans Molly is celebrating her amazing new career and wants to upgrade her junky ld car for a g new Volkswagen Jetta. She heads to Volkswagen’s website and sees the following financing Part 1: 0% APR sounds PERFECT! Proksch Joctober 2012 Alyssa www.ngpf.org Finance for 1.9% APR NGPF Activity Bank Types of Credit […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-186994","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/186994","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=186994"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/186994\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=186994"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=186994"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=186994"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Answer:<\/h3>\n\n\n\n
Down Payment:<\/strong> -$2,500
Cash Allowance:<\/strong> -$1,500
Loan Amount:<\/strong> $24,790 – $2,500 – $1,500 = $20,790<\/strong><\/p>\n\n\n\nExplanation:<\/h3>\n\n\n\n