Question

Purchase Price	$33,500.00			Finance Rate Table
less				Term	No Rebate	Rebate
Down Payment	$3,500.00			1	12.50%	19.70%
Trade-in Value	$4,500.00			2	14.90%	20.90%
Rebate	$1,000.00			3	17.30%	22.10%
				4	18.50%	23.30%
Loan Amount	$24,500.00			5	19.70%	24.50%
	--------------------Term of Loan-----------------------
	1	2	3	4	5
Finance Rate	19.70%	20.90%	22.10%	23.30%	24.50%
Monthly Payment	$2,266.03	$1,257.75	$936.93	$789.29	$711.94
Total Payment	$27,192.35	$30,185.89	$33,729.63	$37,886.09	$42,716.61
Finance Charge	$2,692.35	$5,685.89	$9,229.63	$13,386.09	$18,216.61

Please answer the following below using your Automobile Loan Calculator workbook along with the following information:

• Purchase Price is $33,500
• Down Payment is $3,500
• Trade-in Value is $4,500
• Customers get $1,000 if they elect to take the Rebate
• Use the Finance Rate Table provided below:

• Term	No Rebate	Rebate
  1	12.5%	19.7%
  2	14.9%	20.9%
  3	17.3%	22.1%
  4	18.5%	23.3%
  5	19.7%	24.5%

A) If a customer elects to take the Rebate, what is the Loan Amount?

B) If a customer does not elect to take the rebate, what would the monthly payment be for a 3-year loan?

C) If a customer elects to take the $1,000 Rebate, what would be the Total Payments for a 5-year loan?

D) What is the difference in Monthly Payment amounts for customers who do and do not elect to take the Rebate for a 1-year loan?

E) What is the difference in Finance Charges for customers who do and do not elect to take the Rebate for a 1-year loan?

Answer 1