Christopher has just made the final monthly payment necessary to pay off his car financing. The car had a list price of $25,995. He made a down payment of $2,434. Additionally, there was a $1,626 vehicle registration fee and a $275 documentation fee. He also paid sales tax of 8.44% on the cost of the vehicle. He included the taxes and fees with the purchase price of the car in a four-year finance agreement with an interest rate of 11.10%, compounded monthly. After completing payment of the four-year loan, what was the total amount of money that Christopher paid for his car? Round to the nearest dollar.
Sales tax is 8.44% of $25,995, or about $2,194. After adding the $1,626 registration fee and $275 documentation fee, then subtracting the $2,434 down payment, Christopher financed about $27,656. At 11.10% compounded monthly for 48 months, the total of the loan payments is about $34,374. Add the down payment back to include all the money he paid: $34,374 + $2,434 = $36,808, choice D.
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