In: Finance
You want to buy a car, and a local bank will lend you $30,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 5% with interest paid monthly.
What will be the monthly loan payment? Do not round intermediate steps. Round your answer to the nearest cent.
$
What will be the loan's EAR? Do not round intermediate steps. Round your answer to two decimal places.
%
Using financial calculator BA II Plus - Input details: |
# |
I/Y = Rate = 5/12 = |
0.416667 |
FV = Future value = |
$0 |
N = Total payment term = |
60 |
PV = Present value of loan = |
-$30,000 |
CPT > PMT = Monthly Payment = |
$566.14 |
Alternate formula-based method: |
|
PMT = Payment = |PV| x R% x (1+R%)^N / ((1+R%)^N - 1) |
$566.14 |
EAR = (1+Rate/12)^12 - 1 = =(1+5%/12)^12-1 = |
5.12% |