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12,067 $517 $1,034 An alternative to the 20% rule is to evaluate your budget, determine a monthly payment that you can reasonably afford, and then

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12,067 $517 $1,034 An alternative to the 20% rule is to evaluate your budget, determine a monthly payment that you can reasonably afford, and then incorporate that information withiche maturity and interest rate of a possible loan to determine the value of the potential loan. When this value is added to a saved amount of a down payment, you know the total amount that you can reasonably afford to spend of a new car. To review this process, consider the following case: Bob's Car-Buying Decisions Bob, who lives in Houston, is trying to decide between the following car models: Bob, who lives in Houstor, is trying to decide between the fellowing car modeis: He's currently atcumulated a down payment of $3,000 and he has determined that he can afferd maxirmum payments el $375 per manth. His inkial research in the current cost of auto loans has found that his lowest enst ioan would be made by a bank and would require an interent rate of 6y for five years: Given this information, the maximum amsunt that Bsb can arterd to pay tor his new car is , and the mort expensive ear that he can afford to purchase, without stretching his budget, is: The ford F-150 Picuip The Jecp Patriet The Chewrolet Camaro The kias kin However, he could upgrade to a more expensive model by undertaking several activities. Which of the following activities weuld allew this upgrade? Check an enat applye Go ahead and purchase the more expensive car; he deserves to be thappy Given this information, the maximum amount that Bob can afford to pay for his new car is , and the most expensive carithat he can afford to purchase, without stretching his budget, is: The Ford F150 Pickop The leep Patriot The Chevrolet Camaro The kia Rio However, he could upgrade to a more expensive model by undertaking several activitses. Which of the folioning activities nould alow this upgrade? Check all that apply. Go ahead and purchase the more expensive car; he deserves to be happy Postpone his purchase until he can-save more money for a larger down payment Purchase the more expensive car now and then ask his boss for a raise next week Purchase an upgraded vehicle with fewer and less expensive options

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