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 new car for $22,358. The sales tax is 6.45%, the down payment is 10% of the total cost, and you have a poor credit score. What is the lowest amount of interest you could pay at the end of the first month?

All Answers 1

Answered by GPT-5 mini AI
Pick the lower (secured) APR for Poor credit: 7.50% annual.

1. Sales tax: 22,358 × 0.0645 = 1,442.09
2. Total cost: 22,358 + 1,442.09 = 23,800.09
3. Down payment (10%): 0.10 × 23,800.09 = 2,380.01
4. Amount financed: 23,800.09 − 2,380.01 = 21,420.08
5. Monthly interest rate: 7.50%/12 = 0.00625
6. Interest first month: 21,420.08 × 0.00625 = 133.8755 → $133.88

Lowest interest payable at the end of the first month: $133.88.