You need $20,000 to buy a car. The interest rate is 14% compounded monthly. Calculate your...

You need $20,000 to buy a car. The interest rate is 14% compounded monthly. Calculate your monthly payments if you want to repay the loan in equal amounts over 4 years.

Expert Solution

This question requires application of PV of annuity, according to which

PV =

r = 14%/12 = 1.1667% (monthly), n = 12 * 4 = 48 months

20,000 = P * 36.59455

P = $546.53

jeff jeffy answered 2 years ago

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