Kurt Has $4,500 for a Down Payment and Thinks He

question 92

Multiple Choice

Kurt has $4,500 for a down payment and thinks he can afford monthly payments of $300. If Kurt can finance a vehicle with a 7%, 4-year loan from the automobile dealer, what is the maximum amount he can afford to spend on the car? (Round the answer to the nearest dollar.)

• A) $12,528
• B) $14,400
• C) $16,028
• D) $17,028
• E) $18,028

---

Definitions:

Plowback Ratio

The proportion of earnings retained by a company after dividends have been paid, for reinvestment in its core business.

Retention Ratio

A financial metric indicating the percentage of a company's earnings that is retained and not paid out as dividends; it is also known as the plowback ratio.

Dividends Paid

The total amount of money distributed by a corporation to its shareholders from its earnings.

Total Equity

The total value of a company’s assets minus its liabilities, representing the ownership interest of the shareholders.