Laura is currently paying off her four-year car financing. When she purchased her car, it had a list price of $19,858. Laura traded in her previous car, a good-condition 2000 Honda Insight, for 85% of the trade-in value listed below, financing the rest of the cost at 9.5% interest, compounded monthly. She also had to pay 9.27% sales tax, a $988 vehicle registration fee, and a $77 documentation fee. However, because Laura wants to pay off her loan more quickly, she makes a total payment of $550 every month. How much extra is she paying monthly? Round all dollar values to the nearest cent.Honda Cars in Good ConditionModel/Year2000200120022003Element$5,887$6,080$6,225$6,622Odyssey$8,450$8,693$8,928$9,224Insight$4,384$4,661$5,006$5,440Accord$6,356$6,626$6,817$7,114
The 2000 Insight trade-in value is $4,384, so Laura receives 85% of that, or $3,726.40. Sales tax is $19,858 × 9.27% = $1,840.84; adding the $988 registration fee and $77 documentation fee, then subtracting the trade-in, gives a loan of $19,037.44. Using a monthly interest rate of 9.5% ÷ 12 for 48 months gives a regular payment of about $478.28. Her extra payment is $550 − $478.28 = $71.72, choice B.
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