Question

Ivan Romanchuk is getting a car loan for $25,300 with a term of 4 years at a rate of 4.15%, His monthly payments will be closest to:

	A.	$582.88.
	B.	$572.95.
	C.	$1,223.75.

Answer 1

Given information

1) loan amount =$25,300

3) term of loan = 4 years

but it is provided that loan will be paid in equal monthly installments

so total loan periods = 4 *12 months

= 48 periods

3) Rate of interest = 4.15%

per month interest rate = 4.15%/12

=0.345833%

= 0.00345833 per month

and answer is option B: $572.95

note:; Here PVAF means prrsent value annuity factor..

there will be equal installments repayments for loan ..so we have to calculate monthly installment in annuity method.