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Serena would like to calculate the total cost of a car loan. She should _____.

A) multiply the amount of the loan by the APR
B) use this formula: P x (J / (1 – (1 + J)N))
C) use an online calculator or the formula: P(1+R/12)N
D) call a bank and talk to a loan officer

Respuesta :

MissPhiladelphia
For the answer to the question above asking if Serena would like to calculate the total cost of a car loan. She should calculate the total cost of a car loan. She should multiply the amount of the loan by the APR.
jepessoa

Answer:

The answer is: the best available option is D) call a bank and talk to a loan officer

Explanation:

The formula for calculating total loan cost is:

total loan cost =    (P x r)       x  n

                            1 - (1 + r)ⁿ  

Where:

  • r = Monthly interest rate =  yearly interest rate / 12
  • P = Principal  
  • N = Total # of months ( years on the loan x 12)

Option A is directly wrong, option B calculates monthly payments and option C uses the present value formula

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