Answer:
Jordan will save $16.25 each month by choosing financing through the dealership.
Step-by-step explanation:
The EMI formula is :
[tex]\frac{p\times r\times(1+r)^{n}}{(1+r)^{n}-1}[/tex]
Case 1:
p = 17500
r = [tex]6.9/12/100=0.00575[/tex]
n = [tex]5\times12=60[/tex]
Putting the values in formula;
[tex]\frac{17500\times0.00575\times(1+0.00575)^{60}}{(1+0.00575)^{60}-1}[/tex]
=> [tex]\frac{17500\times0.00575\times(1.00575)^{60}}{(1.00575)^{60}-1}[/tex]
EMI = $345.70
Case 2:
p = 17500
r = [tex]4.9/12/100=0.004083[/tex]
n = [tex]5\times12=60[/tex]
Putting the values in formula;
[tex]\frac{17500\times0.004083\times(1+0.004083)^{60}}{(1+0.004083)^{60}-1}[/tex]
=> [tex]\frac{17500\times0.004083\times(1.004083)^{60}}{(1.004083)^{60}-1}[/tex]
EMI = $329.45
So, difference per month in payments will be :
[tex]345.70-329.45=16.25[/tex] dollars
Hence, Jordan will save $16.25 each month by choosing financing through the dealership.
