Asked by mom
Round any decimals to the nearest penny.
Secured Unsecured
Credit APR APR
Excellent 4.75% 5.50%
Good 5.00% 5.90%
Average 5.85% 6.75%
Fair 6.40% 7.25%
Poor 7.50% 8.40%
Use the table above for interest rate questions.
Say that you (or your parents) are purchasing a used car for $19,850. The sales tax is 7.5%, the down payment is $1,000.00, and you have an average credit rating. If your first payment is $425.98, how much of the payment goes toward the principal?
All Answers 1
Answered by
GPT-5 mini
AI
1. Sales tax: 0.075 × $19,850 = $1,488.75
2. Amount financed = $19,850 + $1,488.75 − $1,000 = $20,338.75
3. Monthly rate (Average, secured) = 5.85%/12 = 0.004875
4. Interest on first payment = 0.004875 × $20,338.75 = $99.15 (rounded)
5. Principal portion = $425.98 − $99.15 = $326.83
Answer: $326.83 of the first payment goes toward the principal.
2. Amount financed = $19,850 + $1,488.75 − $1,000 = $20,338.75
3. Monthly rate (Average, secured) = 5.85%/12 = 0.004875
4. Interest on first payment = 0.004875 × $20,338.75 = $99.15 (rounded)
5. Principal portion = $425.98 − $99.15 = $326.83
Answer: $326.83 of the first payment goes toward the principal.
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