6.8

 Formulas: Total # of monthly payments x Amount paid per month = Total amount of monthly payments Total amount of monthly payments + Down Payment = Total Paid Total Paid – Delivered Price = Finance Charge

 The delivered price of Josh’s car is $23,560. He makes a $2,000 down payment. He pays 48 monthly payments of $560. What is the amount Josh paid for his car? What was the finance charge?

 What is the amount Josh paid for his car? 48 x $560 = $26,880 $26,880 + $2,000 = $28,880 (total paid)

 What was the finance charge? $28,880 - $23,560 = $5,320

 Steve bought a used truck for $9,650. He paid a $2,650 down payment. He also paid 36 monthly payments of $ What is the amount Josh paid for his car?  36 x $ = $8,  $8, $2,650 = $11,084.80

 Brit bought a new car for $47,851. He paid a $4,500 down payment. He also paid 60 monthly payments of $ What is the finance charge on the car?  60 x $ = $48,  $48, $4,500 = $52,  $52, $47,851 = $4,977.20

 Lease Contract  Lease Price  Residual Value  Interest Rate  Lease Term  Security Deposit  Loan Fee  Registration Fees  Mileage Allowed

 James leased a car at $307/ month for 48 months and a down payment of $995. At the end of the lease he had to pay $0.22 for the 2,800 miles over the limit. What were his total lease costs?

 48 x $307 = $14,736 (total lease payments)  $0.22 X 2,800 = $616 (excess miles charge)  $14,736 + $616 + $995 = $16,347 (total lease costs)

 Candy has a 2-year car lease with $528 monthly payments. Mileage limit was 12,000 miles per year. She is charged 20 cents for every mile over the limit. Her total miles for the 2 years was 30,850 miles. What was the total cost of the lease over the 2-years?

 $528 x 12 x 2 = $12,672 lease payments  30,850 – (12,000 x 2) = 6,850 excess miles  6,850 x $0.20 = $1,370 excess mile charge  $12,672 + $1,370 = $14,042 total costs

 Terry has a 4-year car lease with $332 monthly payments. Mileage limit was 12,000 miles per year. He bought 3,000 extra miles each year for 7 cents per mile. Lease processing fees and down payment totaled $418. What was the total cost of the lease over the 4-years?

 $332 x 12 x 4 = $15,936 lease payments  4 x 3,000 = 12,000 miles purchased  12,000 x $0.07 = $840 extra miles  $15,936 + $ = $17,194 total costs

 Will and his dealer negotiated a price of $27,400 for a new car. Will can lease this car for $496 a month for 36 months. Option to buy it at the end of the lease for the residual value of $16,200. If he buys the car now his monthly payment is $822 for 3 years after paying a $2,000 down payment. What is the total cost of purchasing the car either way? Which plan costs less?

 Lease: 36 x $496 = $17,856 (Total lease payments) $17,856 + $16,200 = $34,056 (Total cost to purchase leased car)  Buy: 36 x $822 = $29,592 (Total monthly payments) $29,592 + $2,000 = $31,592 ( Total cost to purchase car out right)  Buying is cheaper! $34,056 – 31,592 = $2,494 (Difference)

 Car costs $18,500. Can be leased for $436/ month with $500 down payment and residual value of $11,000. To purchase the car the monthly payment would be $728 with a $3,100 down payment. The terms are 24 months. Which is less expensive, leasing or buying and by how much?

 Lease: 24x $436 = $10,464 (Total lease payments) $10,464 + $500 +$11,000 = $21,964 (Total cost to purchase leased car)  Buy: 24 x $728 = $17,472 (Total monthly payments) $17,472 + $3,100 = $20,572 ( Total cost to purchase car out right)  Buying is cheaper! $21,964 – 20,572= $1,392 (Difference)

 Car costs $37,960. Can be leased for $623/ month with $995 down payment and residual value of $19,050. To purchase the car the monthly payment would be $873 with a $3,800 down payment. The terms are 4 years. Which is less expensive, leasing or buying and by how much?

 Lease: 4 x 12 x $623 = $29,904 (Total lease payments) $29,904+ $995+$19,050 = $49,949 (Total cost to purchase leased car)  Buy: 4 x 12 x $873 = $41,904 (Total monthly payments) $41,904 + $3,800 = $45,704 ( Total cost to purchase car out right)  Buying is cheaper! $49,949– 45,704= $4,245 (Difference)

 Annual expenses for using the car… Insurance Gas Oil License and Inspection Fees Tires Repairs Garage rent General Upkeep

 Gerri paid $18,700 for her car. Insurance, gas, oil, and other expenses are $2,300. The car depreciates 16% per year. She could earn $145 interest on her investment. What was her operating costs on her car for the year?

 Annual Deprecitaion 16% x $18,700 = $2,992  Annual Cost of Car Operation $2,992 + $2,300 + $145 = $5,437

 Conrad purchased a used car $12,480. His expenses were: gas and oil $1,070; repairs $512; Insurance $981; license plates $83; Loss of interest on investment $561; Depreciation 12%. Find the total operating expense in year one. (Round to nearest $)

 Find the total operating expense in year one. (Round to nearest $)  12% x $12,480 = $1,  $1, $ $512 + $981 + $83 + $561 = $4,  $4,705

 Jess bought an old car for $600. The expenses she paid this year include: gas $610; Maintenance and repairs $780; Property damage and liability insurance $630; License plates $63; Depreciation 10%; Lost interest $15. What is the annual cost of this car?

 What is the annual cost of this car?  10% x $600 = $60  $610 + $780 + $630 + $63 + $60 + $15 = $2,158