Suppose you decide to buy a car for $30,635, including taxes and license fees. You saved...

Suppose you decide to buy a car for $30,635, including taxes and license fees. You saved 9,000 for a down payment and can get a four year car loan at 7.61%. Use PMT = P x r/n over 1-(1+r/n) to the -n(t) power.

Find the monthly payment

Find the total interest for the loan

Solutions

Expert Solution

Loan amount = 30,635 - 9,000 = $21,635

r = 7.61%/12 = 0.006341666667 per month

n = 4 * 12 = 48 months

Monthly payment = $524.2218818334

Total interest = PMT * n - PV

Total interest = 524.2218818334 * 48 - 21,635

Total interest = 25,162.6503280032 - 21,635

Total interest = $3,527.6503280032

jeff jeffy answered 2 years ago

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