Question

Original price of the car: 18,935

You pay 5,000 down

Interest rate 4%

What is your monthly payment for the next 48 months?

Answer 1

The car price = 18,935

Down payment = 5,000

Loan amount = Car price – Down payment = 18,935 – 5,000 = 13,935

Interest rate = 4% pa

Monthly interest rate (i) = 0.04/12 = 0.333%

The no. of repayment (n) = 48

The present value interest factor annuity = PVIFA(i%,n) = (1-(1+i)^-n) /i

PVIFA(0.333%, 48) = (1-(1+0.00333)^-48)/0.00333 = 44.28883 

 

The monthly payment is:

= Loan amount / PVIFA(i%,n)

= 13,935 / PVIFA(0.333%,48)

= 13,395 / 44.28883

= 302.45

 

So, the your monthly payment for the next 48 months is 302.45.

So, the your monthly payment for the next 48 months is 302.45.