You found $34,951 in a cookie jar. Can you buy a $25,000 Miata?
Yes. You have enough money for the car. But what happened to the cookies?
Recall the problem:
You would like to buy a new $25,000 red Miata sports car. To buy the car, you could pay cash for it, or you could buy it on credit.
You might not have $25,000 on hand. The cookie jar seems to be empty. No problem — you can buy on credit, if you qualify.
You have $240 on hand. The credit manager is willing to extend you up to $30,000 of credit. Can you buy the $25,000 Miata?