Math 133

Carisa Sherman

October 1, 2012

Discussion Board

Unit 1

In this week’s discussion board we were to search the internet and locate the sale price for a dream car of our own. My dream car is the 2013 Ford Explorer Four-Runner x5 listed price of $47, 500.00

1. We are going to ignore the sales tax.

2. We are to determine the annual interest rate for the loan using information from a local bank or an internet ad. Reduce this rate by 1%. This is r expressed as a decimal.

3. Interest rated by WellsFargo is 1.79% (auto loans) this rate is reduced by 1%, therefore r=0.79%

4. We are to determine the interest on your loan, using the formula:0 interest=sales price*rate*time, (I=prt)

0I=47,500.00 (0.0079)6=2251.5 or $2,251.50

5. We are to determine the total cost of the new loan, using the formula: o total cost=(sales price*rate)time +Sales Price

0 total cost =47,500.00(0.0079)6+ 47,500.00= 2251.50+47,500.00

=49,751.50 or $49,751.50

6. We are to model the total cost as a linear function. With time as the independent variable: F(t)=(pr)+p. F(t)=(47500)* 0.0079*t+(47500) F(t)=(375.25)t + 47500

7. We divide the total cost by the number of months, to determine the monthly payment. Monthly payments= Total cost/ number of months.

=49,751.50/72=690.993 or $691.00

8. Repeating steps 4 & 5 to determine the cost of the loan if the interest rate had not been reduced by 1%- how much money did you save? Interest rate without reduction is 1.79%

I=PRT

I=47,500.00 (0.0179)6=5101.5 or $5,101.50

Difference in interest =5101.50-2251.50=2850 or $2,850.00

Savings of $2,850.00

9. A summarize your finding by writing a brief statement that includes the pertinent information from the steps above; rates,totals, savings, etc……

The car loan rate for 72 months period is 1.97%. using “ simple interest car loans” this rate is reduced to 0.79%. therefore, the total cost of loan for a car with a sales price of $47,500.00 for 6 years period will be about...