Praxis 5511 Practice Question
Rose bought a $13,500 car, paid 20% down, and paid the rest in equal monthly installments for 3 years, no interest. What was each monthly installment?
Correct Answer: A
Rationale: To determine the monthly installment, first calculate the down payment. Rose paid 20% of $13,500, which is $2,700. Subtracting this from the total cost leaves $10,800 to be financed. Since she will pay this amount over 3 years (36 months), divide $10,800 by 36, resulting in a monthly installment of $300.
Option B ($325) is incorrect as it suggests a higher monthly payment than calculated. Option C ($350) also exceeds the correct amount, leading to an overestimation of payments. Option D ($375) is even higher, making it an unrealistic option for the given terms.
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