Blank options
- $5040, $3600, $2520
- $23,112, $15,073, $20,097
How much car can I afford? Before buying a car, it is critical that you determine both the complete price of the vehicle and what you can afford to spend. This information is essential in deciding whether to pay cash or finance the vehicle with a loan. The difference between these two methods of payment, however, is the difference between paying the car's full price versus making a much smaller down payment and fitting the monthly payments into your budget. There are two schools of thought about how much car you can afford. Financial experts recommend that the amount of your car payment should not exceed 20% of your net monthly income. Others suggest that if you can accommodate the payment in your budget, then it's acceptable-although you shouldn't obligate yourself to eating rice cakes for the next four years. Hilary is 24 years old, and her current gross monthly income is $3,600. Given an average personal tax rate of 30% for her federal taxes, Hilary's net monthly income is . If she follows the advice of financial experts, what is the maximum amount that she should spend to purchase a new vehicle? (Note: Round your answers to the nearest whole dollar.) $504$1,008$1,512 An alternative to the 20% rule is to evaluate your budget, determine a monthly payment that you can reasonably afford, and then incorpo that amount of a down payment, you know the total amount that you can reasonably afford to spend on a new car. To review this process, consider the following case: Hilary's Car-Buying Decisions Hilary, who lives in St. Louis, is trying to decide between the following car models: She's currently accumulated a down payment of $2,000 and she has determined that she can afford maximum payments of $425 per month. Her initial research on the current cost of auto loans has found that her lowest cost loan would be made by a credit union and would require anterest rate of 6% for four years. Given this information, the maximum amount that Hilary can afford to pay for her new car is , and the most expensive car that she can afford to purchase, without stretching her budget, is: The Ford F-150 Pickup The Chevrolet Camaro The Jeep Patriot The Kia Rio However, she could upgrade to a more expensive model by undertaking several activities. Which of the following activities would allow this upgrade? Check all that apply. Purchase the more expensive car now and figure out later how to pay for it Go ahead and purchase the more expensive car; she deserves to be happy Take a better-paying job or another, or part-time, job that would give her the additional income to support a larger monthly payment How much car can I afford? Before buying a car, it is critical that you determine both the complete price of the vehicle and what you can afford to spend. This information is essential in deciding whether to pay cash or finance the vehicle with a loan. The difference between these two methods of payment, however, is the difference between paying the car's full price versus making a much smaller down payment and fitting the monthly payments into your budget. There are two schools of thought about how much car you can afford. Financial experts recommend that the amount of your car payment should not exceed 20% of your net monthly income. Others suggest that if you can accommodate the payment in your budget, then it's acceptable-although you shouldn't obligate yourself to eating rice cakes for the next four years. Hilary is 24 years old, and her current gross monthly income is $3,600. Given an average personal tax rate of 30% for her federal taxes, Hilary's net monthly income is . If she follows the advice of financial experts, what is the maximum amount that she should spend to purchase a new vehicle? (Note: Round your answers to the nearest whole dollar.) $504$1,008$1,512 An alternative to the 20% rule is to evaluate your budget, determine a monthly payment that you can reasonably afford, and then incorpo that amount of a down payment, you know the total amount that you can reasonably afford to spend on a new car. To review this process, consider the following case: Hilary's Car-Buying Decisions Hilary, who lives in St. Louis, is trying to decide between the following car models: She's currently accumulated a down payment of $2,000 and she has determined that she can afford maximum payments of $425 per month. Her initial research on the current cost of auto loans has found that her lowest cost loan would be made by a credit union and would require anterest rate of 6% for four years. Given this information, the maximum amount that Hilary can afford to pay for her new car is , and the most expensive car that she can afford to purchase, without stretching her budget, is: The Ford F-150 Pickup The Chevrolet Camaro The Jeep Patriot The Kia Rio However, she could upgrade to a more expensive model by undertaking several activities. Which of the following activities would allow this upgrade? Check all that apply. Purchase the more expensive car now and figure out later how to pay for it Go ahead and purchase the more expensive car; she deserves to be happy Take a better-paying job or another, or part-time, job that would give her the additional income to support a larger monthly payment
