Question

In: Finance

Jesse Pinkman is thinking about trading cars. He estimates he will still have to borrow ​$26,000...

Jesse Pinkman is thinking about trading cars. He estimates he will still have to borrow ​$26,000 to pay for his new car. How large will​ Jesse's monthly car loan payment be if he can get a 4​-year ​(48 equal monthly​ payments) car loan from the​ university's credit union at an APR of 9.6 percent compounded​ monthly?

Solutions

Expert Solution

Sol:

Present value (PV) = $26,000

Periods (NPER) = 4 years, Monthly = 12 x 4 = 48

Rate = 9.6%, Compounded Monthly = 9.6/12 = 0.80%

To determine monthly car loan payment we can use PMT function in excel:

PV

-26000

NPER

48

Monthly rate

0.80%

Monthly payment

$654.44

Therefore monthly car loan payment will be $654.44

Workings

jeff jeffy answered 2 years ago
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