Algebra 1

Published by Prentice Hall
ISBN 10: 0133500403
ISBN 13: 978-0-13350-040-0

Chapter 11 - Rational Expressions and Functions - 11-2 Multiplying and Dividing Rational Expressions - Practice and Problem-Solving Exercises - Page 663: 60

Answer

The second financing plan will make the total cost lesser by $736.

Work Step by Step

Note that the cost of the car to be purchased is %18000. Both car dealership offers two different 48month financing plans. The first plan offers 0% interest for 4 years hence the total cost to be paid in 4 years is= $18000.$ The second plan offers a $2000$ discount hence the remaining cost is =$18000-$2000=$16000$. But the $16000$ remaining cost will have an interest rate of 7.9% or 0.079 for 4 years, the total interest on top of the $16000$ cost is= $16000(0.079)$=$1264$. The total cost of the car if the buyer of the cargoes for the second plan is $16000+1264=17264$. The first plan costs the buyer $18000$ while the second plan costs only$17264$ which is $736$ lesser than plan one.
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