The big loan can afford for car is $23,280
Step-by-step explanation:
Here we have , You can afford a $400 per month car payment. You've found a 5 year loan at 3% interest. We need to find How big of a loan can you afford .Let's find out:
Let's suppose amount of loan is $x , So, per month he can afford $400 so for 5 year :
5 year = 60 months
⇒ 400 (60)
⇒ $ 24,000
Now , He took a 5 year loan at 3% interest for amount $24,000 i.e.
⇒ $ [tex]$24,000 \times 3%[/tex] %
⇒ $720
total amount paid in 5 years - interest amount
= 24,000 - 720
= $ 23,280
The big loan can afford for car is $23,280
