Question

Q: Tom would like to take out a secured loan to help pay for a vacation this summer. He has offered his car as collateral. His car is worth $3,500. His bank can offer loans for 80% of collateral value. The vacation he has planned will cost $4,750. Approximately how much additional collateral will Tom need to offer in order to borrow enough to go on his vacations planned?
A: $2,437.50

please walk me through the steps so that I have an explanation/understanding.

Answer 1

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