**EstateName.com** – How Much Total Interest Will Molly Pay Using This Plan

## Molly is celebrating her exciting new career and wants to upgrade…

Molly is celebrating her exciting new career and wants to upgrade her junky old car for a shiny new Jeep Patriot. She heads to Jeep’s website and sees the following financing deals:

Finance for 0% apr

for 36 months

plus up to 1,500 cash allowance

Note: For this activity, assume Molly’s going to pay the exact MSRP of $25,495. This is most likely NOT true, but we’ll use it for simplicity.

Answer the following questions using the details from the 0% APR offer above.

**Please round all answers to the nearest dollar.**

- Molly has a $5000 down payment saved for this purchase, and the dealer’s $1500 Cash Allowance will come straight off her total. How much loan does Molly need
- How much will Molly’s monthly payment be?
- How much total interest will Molly pay using this plan?
- When Molly adds all of her payments, how much will the car cost her?

**Part II: Maybe the 1.9% is more manageable?**

Oh, boy! Look at that monthly payment from Question 2 above! Molly cannot afford the monthly payment using the 0% financing. She opens up Bankrate’s Loan Calculator to see how much she’d pay with the other financing option.

- Using the Loan Calculator and the 1.9% APR offer, how much will Molly’s monthly payment be?
- How much total interest will Molly pay using this plan?
- When Molly adds all of her payments, how much will the car cost her using this plan?

**Part III: Reading the Fine Print**

Excited to buy her dream car, Molly rushes into her local Jeep dealership. Molly picks out a car, sits down at the financing desk, and hears the following:

“Well, we ran your credit history. You’ve got a really thin file — just a year’s worth of student loan payments. The deal you saw was for ‘well qualified buyers.’ The best deal we can offer you is 6.6% for 60 months. A little more bad news — the cash allowance is also based on credit history, so you don’t qualify for $500. That said, you’re excited about a Jeep, and I want to see you driving one, so I can do $400 for you!”

- Molly still has a $5000 down payment. How much loan does Molly need?
- How much will Molly’s monthly payment be using the Bankrate calculator?
- How much total interest will Molly pay using this plan?
- When Molly adds all of her payments, how much will the car cost her?

Answer & Explanation

Solved by verified expert

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### How Much Total Interest Will Molly Pay Using This Plan

Sumber: https://www.coursehero.com/tutors-problems/Finance/25551205-Molly-is-celebrating-her-exciting-new-career-and-wants-to-upgrade-her/