You Can Afford Monthly Payments of $450, and You Find

question 42

Multiple Choice

You can afford monthly payments of $450, and you find a car dealer offering a 2.6% annual rate compounded monthly on a 4-year loan. Rounded to the nearest $100, what is the most expensive car you can afford?

• A) $18,700
• B) $18,900
• C) $20,500
• D) $21,600

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Definitions:

Operating Activities

Business actions directly related to the production and delivery of goods and services, generating the primary revenue streams.

Equipment

In business, equipment refers to the tangible assets used in operations, such as machinery, computers, and tools, which are not intended for sale.

Depreciation Expense

The portion of the cost of a fixed asset that is considered consumed during its period of use by a business.

Prepaid Expenses

Costs incurred before receiving goods or services that are expected to be provided later.