Question

Suppose Capital One is advertising a

60​-month,

5.38%

APR motorcycle loan. If you need to borrow

$9,400

to purchase your dream​ Harley-Davidson, what will be your monthly​ payment?​ (Note: Be careful not to round any intermediate steps less than six decimal​ places.)

Answer 1

The computation of the monthly payment could be determined by using the PMT formula

Given that

RATE = 5.38% / 12 =  0.4483%

NPER = 60 months

PV = $9,400

FV = $0

The formula is shown below:

PMT = (RATE;NPER;-PV;FV;type)

The present value comes in negative

After applying the above formula, the monthly payment is $179.029005