You borrow $30,875 to purchase a car, all included. The loan terms are 48 months at...

You borrow $30,875 to purchase a car, all included. The loan terms are 48 months at 3.6% interest (APR = 3.6%). What is your monthly car payment?
a. $691.62
b. $679.37
c. $645.58
d. $637.71

Solutions

Expert Solution

Monthly Payment = P *R*(1+R)^N /[(1+R)^N -1]

Where, P = Principal

R = Rate of Interest per period

N = Number of Periods

= 30875*(3.6%/12)*(1+(3.6%/12))^48 / [(1+(3.6%/12))^48 -1]

= 30875 * 0.003 * (1+0.003)^48 / [(1+0.003)^48-1]

= 92.625 * 1.15463517818 / [1.15463517818 -1]

Monthly Car Payments = $691.61

jeff jeffy answered 2 years ago

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