George Wants to Borrow $30,000 to Purchase a Car

question 19

Essay

George wants to borrow $30,000 to purchase a car.After looking at a monthly budget he realizes that all he can afford to pay per month is $350.The dealership is offering a 4.77% loan.When George hears how much interest he will pay over the life of the loan,he decides to cut back on his entertainment expenses and pay $400 per month.How much in interest will George save by paying an extra $50 per month? Hint: Round any loan length calculations to the nearest quarter of a year.

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Definitions:

Revenues

The total amount of money received by a company for goods sold or services provided during a certain time period.

Household Consumers

Individuals or groups purchasing goods and services for personal use, not for manufacture or resale.

Full-Time Employees

Workers who are employed for the full number of hours defined as standard by their employer, often receiving full employment benefits.

Financial Year

A financial year is a 12-month period used for calculating annual financial statements in businesses and other organizations.