For this part of the project, you will get to analyze the financing of a new car or truck. This will be
done by hand, using the formulas and strategies we studied in the Finance unit (not using
finance calculators, apps, etc.). You may choose any make or model that you like (dream big if you
like), but you will need to use real numbers from real publications or legitimate, local websites. At a
minimum, please include:
1. An Introduction: Include a description of the vehicle you are pretend buying, make model,
additional options, etc. and why you chose this vehicle (include images, links to images,
source information, etc.).
2. Data and Calculations.
a. The purchase price (include direct links to source information) of the vehicle.
b. The sales tax rate (as a percentage) to be paid based on your locality.
c. A description of, and the “trade-in value” for, a car you will trade in on the purchase
(include direct links to source information). This can be a car you or your family
currently owns.
d. You will make a 15% of the total purchase price (including tax) down payment in
cash, and then finance the rest over a period of time. Since you will need to borrow
money from the bank, you will need an interest rate for the loan (include direct links
to source information).
e. Provide a detailed breakdown of the purchase, ending with the calculation of your
monthly payment for the purchase.
3. A Conclusion: Calculate the total amount you will end up paying for the vehicle at the end of
the loan period, and how much interest you will have paid on the loan.
Note: You do not pay sales tax on the value of your trade-in vehicle, so be sure to take that amount
out before calculating the tax on your purchase.

Answer:

Step-by-step explanation:

1. Introduction: Imagine you are considering purchasing a brand new 2023 Tesla Model 3. You've always been fascinated by electric vehicles due to their environmental benefits and cutting-edge technology. The Model 3 appeals to you because of its sleek design, advanced autopilot features, and the positive impact it can have on reducing greenhouse gas emissions. 

2. Data and Calculations:

a. Purchase Price of the Vehicle:

The base price of a 2023 Tesla Model 3 is $40,000.

Additional options, such as autopilot and premium interior, bring the total purchase price to $50,000.

b. Sales Tax Rate:

The sales tax rate in your locality is 7.5%.

c. Trade-in Vehicle:

You plan to trade in your current vehicle, a 2017 Honda Civic. You've researched and found its trade-in value to be $10,000.

d. Down Payment and Interest Rate:

You will make a 15% down payment in cash, which is $7,500 (15% of $50,000).

You will need to finance the remaining amount, which is $42,500 ($50,000 - $7,500).

You've applied for a car loan with your local bank, and they offered you an interest rate of 4.5%.

e. Monthly Payment Calculation:

You will finance the $42,500 over a 60-month (5-year) period.

To calculate the monthly payment, you can use the formula for a fixed-rate auto loan:

Monthly Payment=P⋅r⋅(1+r)^n / (1+r)^(n−1)​

where:

P is the principal amount borrowed, which is $42,500.

r is the monthly interest rate, which can be calculated by dividing the annual interest rate by 12 (4.5% / 12).

n is the total number of payments, which is 60 (5 years x 12 months per year).

After calculating, you'll find your monthly payment.

3. Conclusion:

The total amount you will end up paying for the Tesla Model 3 at the end of the 5-year loan period, including the interest, is the sum of all monthly payments.

Calculate how much interest you will have paid on the loan by subtracting the principal amount borrowed from the total amount paid.

This analysis helps you understand the financial aspects of buying your dream car and the long-term costs associated with the purchase.