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6.5.3 Quiz: Deferred Payments
Question 8 of 10
Alondra took out a car loan for $22,500 that has a 0% APR for the first 24
months and will be paid off with monthly payments over 5 years. For how
many months will Alondra be charged interest?
○ A. 60 months
○
B. 24 months
OC. 36 months
○ D. 84 months
SUBMIT

Verified Answer :

GinnyAnswer

To solve this problem, we need to understand the terms of the car loan that Alondra took out. The loan has a 0% Annual Percentage Rate (APR) for the first 24 months and has a total duration of 5 years, which she will pay off with monthly payments.

First, we need to determine how many months are in 5 years, because that's the total duration of the loan. There are 12 months in one year, so for 5 years, we calculate the total number of months as:

5 years × 12 months/year = 60 months

The loan has a 0% APR for the first 24 months, which means for those 24 months, Alondra will not be charged any interest.

We need to find out for how many months she will actually be charged interest. We can do this by subtracting the interest-free period from the total duration of the loan:

Total duration of the loan - Interest-free period = Number of months interest will be charged

60 months - 24 months = 36 months

Therefore, Alondra will be charged interest for 36 months once the 0% APR period ends.

The correct answer is:

C. 36 months