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12 January, 00:48

One of the largest automobile dealers in the city advertises a 3-year-old car for sale as follows: Cash price $3575, or a down payment of $375 with 45 monthly payments of $93.41. Susan DeVaux bought the car and made a down payment of $800. The dealer charged her the same interest rate used in his advertised offer. How much will Susan pay each month for 45 months? What effective interest rate is being charged?

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  1. 12 January, 02:32
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    monthly payment = $81 interest rate = 15%

    Explanation:

    You can use a loan calculator to determine the the effective interest rate of the loan:

    loan's principal = $3,575 - $375 = $3,200 number of monthly payments = 45 or 3.75 years monthly payment = $93.41

    interest rate = 15%

    Now we can calculate Susan's monthly payment:

    loan's principal = $3,575 - $800 = $2,775 number of monthly payments = 45 or 3.75 years interest rate = 15%

    monthly payment = $81
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