Jana has $1,500 for a down payment and thinks she can afford monthly payments of $300. If she can finance a vehicle with a 7%, 4-year loan, what is the maximum loan amount Jana can afford?
a.
$12,528
b.
$14,028
c.
$16,028
d.
$17,900
e.
$18,028
The amount she can afford is the present value of monthly payments which is calculated in excel as:
=PV(7%/12,4*12,-300)+1500
=14028
The answer is b)
Jana has $1,500 for a down payment and thinks she can afford monthly payments of $300....