# You are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle

## Question:

You are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle is $93,500. You negotiate a six-year loan, with no money down and no monthly payments during the first year. After the first year, you will pay $1,300 per month for the following five years, with a balloon payment at the end to cover the remaining principal on the loan. The APR on the loan with monthly compounding is 5 percent. What will be the amount of the balloon payment six years from now?

CompoundingCompounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will...

Fantastic news! We've Found the answer you've been seeking!

## Step by Step Answer:

**Related Book For**