Question

a $43,000 new car loan is taken out with the terms 9​% APR for 48 months. How much are monthly payments on this​ loan? A.$1,070.06 B.$1,177.06 C.$1,284.07 D.$1,391.07

Answer 1

Monthly payment	=	[P × R × (1+R)^N ] / [(1+R)^N -1]
Using the formula:
Loan amount	P	$                                                            43,000
Rate of interest per period:
Annual rate of interest		9.000%
Frequency of payment	=	Once in 1 month period
Numer of payments in a year	=	12/1 =	12
Rate of interest per period	R	0.09 /12 =	0.7500%
Total number of payments:
Frequency of payment	=	Once in 1 month period
Number of years of loan repayment	=	4.00
Total number of payments	N	4 × 12 =	48
Period payment using the formula	=	[ 43000 × 0.0075 × (1+0.0075)^48] / [(1+0.0075 ^48 -1]
Monthly payment	=	$                                                         1,070.06

Answer is $1,070.06

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