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explain the steps

use this table as a reference for your interest rate percentages.
secured unsecured
credit apr (%) apr (%)
excellent 4.80 5.25
good 5.15 5.65
average 5.85 6.20
fair 7.00 7.65
poor 8.20 9.15
8. you (or your parents) purchase a new car for $19,725.00 plus 4.75% sales tax. the down
payment is $2,175.00 and you (or your parents) have an average credit rating. how much
interest is accrued after the first month?
(2 points)
9. you (or your parents) purchase a used car for $15,867.00 plus 5.25% sales tax. the down
payment is 10% of the total cost and you (or your parents) have an excellent credit rating.
what is your principal balance at the start of the loan?
(2 points)
10. you (or your parents) are debating about whether to buy a new car for $19,072.00 or a used car
for $15,635.00. sales tax is 4.5%. you (or your parents) plan to make a down payment of
$1,200.00 and your credit rating is fair. what is the difference in interest accrued by the end of
the first month?
(

Divide the APR by 360 days and multiply it by 30 days to get the monthly interest. Each loan is usually secured by the car you bought. So we will use the secured APR.

8. Average rating secured apr: 5.85% divide by 360 multiply by 30:  0.4875% monthly rate
Cost of car: 19,725 ; sales tax: 4.75% ; down payment: 2,175

19,725 x 1.0475 =  20,661.94 - 2,175 = 18,486.94 loan amount
18,486.94 x 0.4875% = 90.12 accrued interest for the 1st month.

9. Excellent rating secured apr: 4.80% divide by 360 multiply by 30: 0.40% monthly rate
Cost of car: 15,867 ; sales tax: 5.25% ; down payment: 10% of total cost

15,867 x 1.0525 =  16,700.02 x 90% = 15,030.02 the principal balance at the start of the loan.

10. Fair rating secured apr: 7% divide by 360 multiply by 30: 0.5833% monthly rate
Cost of new car: 19,072 ; sales tax: 4.5% ; down payment: 1,200
Cost of used car: 15,365; sales tax: 4.5% ; down payment: 1,200

19,072 x 1.045 = 19,930.24 - 1,200 = 18,730.24
18,730.24 x 0.5833% = 109.25 accrued interest

15,365 x 1.045 = 16,056.43 - 1,200 = 14,856.43
14,856.43 x 0.5833% = 86.66 accrued interest

109.25 - 86.66 = 22.59 is the difference in interest accrued by the end of the first month.