Prof. Finance is thinking about trading cars. She estimates she will still have to borrow $35,000 to pay for her new car.

(Annuity payments) Prof. Finance is thinking about trading cars. She estimates she will still have to borrow $35,000 to pay for her new car. How large will Prof. Finance's monthly car loan payment be if she can get a 6-year (72 equal monthly payments) car loan from the VTech Credit Union at 5.6 percent APR? Use five decimal places for the monthly percentage rate in your calculations.

The monthly payment of Prof. Finance will be $

Expert Solution

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

PV =

r = 5.6%/12 = 0.4667% (monthly), n = 72 (months

35,000 = P * 61.03246

P = $573.47

jeff jeffy answered 2 years ago

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