AnswersFT GMS AMDM B IC – 72Topic TestQuestion 22
22
QuizMultiple Choice

Topic Test

Question 22 • FT GMS AMDM B IC – 72

The Clean and Green car dealership is running a special on 2008 hybrids. The dealership requires the customer to make a down payment of 10% of the cost of the vehicle and will finance the balance with a 6.78% annual interest loan for 60 months (5 years). You are interested in an EviroClean hybrid that costs $28,250. Not including the down payment, how much will you pay over the lifetime of the loan?

Answer
A
$30,048.60
B
$33,387.00
C
$36,726.00
D
$39,250.30

Explanation

The 10% down payment is not included, so the amount financed is 90% of $28,250: $28,250 × 0.90 = $25,425. Using a 6.78% annual interest rate over 60 monthly payments, the loan payment is about $500.81 per month. Multiplying by 60 gives about $30,048.60, so the best answer is $30,048.60.

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