American Intercontinental University
2013 Dodge Challenger SRT8 2dr Coupe-$50,895
Financing rate is 4.12%
Time estimated for the interest rate given is 5 years
interest = sale price*rate*time, (I = prt).
I = 50,895*0.0212*5
I = 5394.87
Total cost = (sale price*rate)time + Sale Price
C = (P*R)T + Sale Price
C = (50,895*0.0212)5+50,895
C = 56289.87
Model the total cost as a linear function, with time as the independent variable: F(t) = (pr)t + p.
F(5) = (50,895*0.0212)5+50,895
Divide the total cost by the number of months, to determine the monthly payment. 56289.87/60 = 938.16
Repeat steps 4 & 5 to determine the cost of the loan if the interest rate had not been reduced by 2% – how much money did you save? interest = sale price*rate*time
I = 50895*0.0412*5
I = 10484.37
C = 61379.37
61379.37 - 56289.87 = $5,089.50
The car of my dreams has always been a Dodge Charger with all the add ons. Starting out at $50,895, with the price including all of the add on features that I would like to have on my car (Cars.com, 2013). According to the ad, if I were to bring the interest rate that I was given of 4.12%, my interest rate would drop down to 2.12% which would give me a great deal of savings (Bankrate.com, 2012). The cost of the loan would have been a regular price of $61,379.37 at any car dealership. However, with the ad that was posted I found that I would be able to save $5,089.50, bringing the total cost of my car loan down to $56,289.87. At the rate of this car loan, my monthly payment would be $938.16. I feel bad for anyone that actually has a payment of this high monthly payment.
Bankrate.com. (2012). Current auto loan intrest rates. Retrieved from http://www.bankrate.com/finance/auto/current-interest-rates.asp Cars.com. (2013). Cars.com. Retrieved from http://www.cars.com/go/configurator/summary.jsp