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##### Simple Interest Car Loan Linear Function

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Question;Simple;Interest Car Loan Linear Function;A;financial institution in your community is advertising ?Simple Interest Car;Loans.? Here is their ad;Looking;for an attractive loan for the car of your dreams? Well, you have to look no;more. Come in and show us your car deal. We will match any car loan and reduce;the interest rate by 1%, with our ?simple interest car loan?. No down;payment needed, and no trade-ins. Our loans must have a minimum interest rate;of.5%.;In;this assignment you are examining common applications of linear;functions. Here, the linear function is F(r) = (pt)r + p, where r;is the independent variable (the interest rate changes) and F(r) is the;dependent variable (F(r) is the total cost of the car for different interest;rates). For F(r) = (pt)r + p to be considered a linear function, the;values of p (the sales price of the car) and t (the time in years;for repaying the loan) must remain constant in the calculations.;1.;Search the Internet and locate the sale price for the car of your dreams. (For;the purpose of this exercise, you can ignore sales, down payments, taxes, and;other normal purchase expenses.)This is p in this assignment.;2.;Determine the annual interest rate for your loan using information from a;local bank or an internet ad and be sure to give your references. Reduce;this rate by 1%. This is one value of r, but expressed as a;decimal. The decimal equivalent of this interest rate is one of the values;of r in this assignment.;3.;Decide the time, in years, you wish to repay the loan (typically, 3-7 years;half years like 5.5 years are okay). This is t in this assignment.;4.;Determine the interest on your loan, using the formula;Interest =;sale price*time*rate, (I = ptr).5.;Determine the total cost of your loan, using the formula;Total cost;= (sale price*time)rate + Sale Price6.;Model the total cost as a linear function, with interest rate as the;independent variable;TC(r) =;(pt)r + p.7.;Divide the total cost by the number of months, to determine the monthly;payment.;8.;Repeat steps 4, 5, 6, and 7 to determine the cost of the loan if the;interest rate had not been reduced by 1% ? how much money did you save monthly;and in total?;9.;Summarize your findings by writing a brief statement that includes the;pertinent information from the steps above, rates, totals, savings, etc.;10.;Include references formatted according to APA style.;11.;Respond to a classmate?s posting. If you think there may be an error, feel free;to help your classmate without providing the correct answer. Otherwise, analyze;the post in comparison to yours or add new information to the discussion.;12.;Assume that you have no more than $600 per month to spend for a car loan. Based;on your experience with these calculations, is there any combination of your;lower interest rate and number of years (up to 7 years) that you could afford;at $600 per month that would give you a ?good deal? for buying your dream car?;Explain why or why not.

Paper#54905 | Written in 18-Jul-2015

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