document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1200899>Question 1200899</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Dan is contemplating trading in his car for a new one. He can afford a monthly payment of at most $400. If the prevailing interest rate is 3.9%/year compounded monthly for a 48-month loan, what is the most expensive car that Dan can afford, assuming that he will receive $8000 for his trade-in? (Round your answer to the nearest cent. </SPAN>\n" );
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document.write( "Answer: <font color=red>$25,750.69</font>\r<BR>\n" );
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document.write( "Work Shown:\r<BR>\n" );
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document.write( "P = 400 = monthly payment<BR>\n" );
document.write( "i = r/12 = 0.039/12 = 0.00325 = decimal form of the monthly interest rate<BR>\n" );
document.write( "n = 48 months<BR>\n" );
document.write( "L = unknown loan amount\r<BR>\n" );
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document.write( "Solve for L<BR>\n" );
document.write( "P = (L*i)/( 1 - (1+i)^(-n) )<BR>\n" );
document.write( "400 = (L*0.00325)/( 1 - (1+0.00325)^(-48) )<BR>\n" );
document.write( "400 = L*0.02253433364068<BR>\n" );
document.write( "L = 400/0.02253433364068<BR>\n" );
document.write( "L = 17,750.6912952554<BR>\n" );
document.write( "L = 17,750.69<BR>\n" );
document.write( "Here's a useful calculator to verify the result<BR>\n" );
document.write( "<a  rel=nofollow HREF= \"https://www.calculatorsoup.com/calculators/financial/how-much-loan-can-i-afford.php\">https://www.calculatorsoup.com/calculators/financial/how-much-loan-can-i-afford.php</a>\r<BR>\n" );
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document.write( "If the trade-in option wasn't available, then the most he can afford would be $17,750.69\r<BR>\n" );
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document.write( "Add on the $8000 trade-in value<BR>\n" );
document.write( "17750.69 + 8000 = 25,750.69\r<BR>\n" );
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document.write( "The most expensive car Dan can afford is <font color=red>$25,750.69</font>\r<BR>\n" );
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document.write( "This is assuming all fees are part of that figure. <BR>\n" );
document.write( "This means that if the sticker price was say $25,000 and the fees totaled $2000, then that goes over the $25,750.69 threshold. <BR>\n" );
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