In: Finance

# EMI calculation

You bought a Tesla Model 3 for \$34287 and the auto loan is a 60-month fixed-rate loan with an interest rate of 2.4% per year. What is your monthly payment? (Round to the nearest dollar.)

## Solutions

##### Expert Solution

In order to get the stipulated monthly payments towards the Tesla model car, we use the EMI formula, where EMI means Equated Monthly Installment.

The formula is: EMI formula =Principal * Rate*(1+r)/[(1+r)-1]

n= number of monthly payment periods over the fixed payment period.

r=rate of interest over the fixed period per year.

By using Equated Monthly Installment formula.

We get:

EMI formula =Principal * Rate*(1+r)/[(1+r)-1]

Rate =2.4%/12 =0.002 per month

N= 60 months *[5*12]

EMI= 34287 *0.002*(1+0.002)60 / [(1+0.002)60 -1]

Ans. =& 607 each month.

By using Equated Monthly Installment formula then the answer will be = 607 each month.