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E-Loan,an online lending service recently offered 60-month auto loans at 6% compounded monthly to applicants with...

E-Loan,an online lending service recently offered 60-month auto loans at 6% compounded monthly to applicants with good credit ratings. If you have a good credit rating and can afford monthly payments of $339,how much can you borrow from E-Loan? What is the total interest you will pay for this loan?

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Expert Solution

n = 60

r = 6%/12 = 0.005

PMT = 339

We can afford to borrow $17,534.96509764 from E-Loan

Total interest paid = PMT * n - PV

Total interest paid = 339 * 60 - 17,534.96509764

Total interest paid = $2,805.03490236

jeff jeffy answered 2 years ago
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