Answer:
$17,028.06
Step-by-step explanation:
Given that :
Kaylee's down payment = $4500
monthly payment = $300
If he can finance a vehicle with a 7%, 4-year loan (assume a 0% tax rate).
the maximum amount Kaylee can afford to spend on the car is being calculated as the present value for all the payments.
= [tex]=\$4,500 +\dfrac{\$300}{(1+\frac{0.07}{12})} + \dfrac{\$300}{(1+\frac{0.07}{12})^2} +\dfrac{\$300}{(1+\frac{0.07}{12})^3} + ....+ \dfrac{\$300}{(1+\frac{0.07}{12})^{46}}+ \dfrac{\$300}{(1+\frac{0.07}{12})^{47}}+ \dfrac{\$300}{(1+\frac{0.07}{12})^{48}}[/tex]
Using the online desmos calculator to determine the maximum amount Kaylee can afford to spend on the car; we have:
= $17,028.06
