In: Finance
(32) You plan to buy a car that has a total "drive-out" cost of $21,100. You will make a down payment of $2,321. The remainder of the car's cost will be financed over a period of 4 years. You will repay the loan by making equal monthly payments. Your quoted annual interest rate is 12% with monthly compounding of interest. (The first payment will be due one month after the purchase date.) What will your monthly payment be?
$581.69 |
$489.63 |
$515.22 |
$494.52 |
$460.75 |
Monthly payment | [P×r×(1+r)^n]÷[(1+r)^n-1] | ||
Here, | |||
1 | Interest rate per annum | 12.00% | |
2 | Number of years | 4 | |
3 | Number of compoundings per per annum | 12 | |
1÷3 | Interest rate per period ( r) | 1.00% | |
2×3 | Number of periods (n) | 48 | |
Loan amount (P) | $ 18,779 | =21100-2321 | |
Monthly payment | $ 494.52 | ||
(18779×1%×(1+1%)^48)÷((1+1%)^48-1) |