Financial institutions often offer lower auto loan rates for new cars than used ones. A local credit union advertises new car loans at 2.79% APR and used car loans at 3.29% both for up to 72 months.

Tyresa wants to buy a car but doesn’t want to spend more than $350 a month for a maximum of four years. What is the maximum loan amount she can take out for a new car and a used car using the advertised rates?

Use the formula,

A=P[(1+r)^n-1]/r(1+r)^n

where P is the monthly payment, r is the monthly rate, and n is the number of months. Show all of your steps.