Loan is the amount lender give to borrower in return of interest and payment of principal amount on its maturity.$597.08 is the monthly payment, 0 interest and cost of car is $21,495.
What is loan?
A contract between lender and borrower where borrower gets the money(principal) and obligated to pay interest and the principal about as per the terms of the contract.
Price of the car= $25495
Down payment=$2500
Cash Allowance=$1500
2. At 0% APR, monthly payment= loan amount/period of loan
Loan amount needed=price of car- down payment- cash allowance
= $25495 - $2500-$1500
= $21495
So the monthly payment=$21495/36
=$597.08
3. Molly will pay 0% interest because there is no interest rate specified.
4. The cost of the car to Molly is $21,495.
Therefore, it can be said that the above calculation aptly describes the statement.
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